Highest NAV gauranteed..!

Recently there have been a lot of new funds which have come up gaurenteeing the highest NAV over the next seven years and i just wanted to share my opinion about this.

I invested around a yr back in the birla platinum plus fund where they were setting the NAV once a month and have had quite good returns from the fund. In fact because of the spurt in the equity market last year , I made a few bucks on the account and feel good about the investment and that amount is gaurenteed... even if the market falls--- so thats a good feeling.

In the recent year , this trend has caught on and there are loads of new ULIPs launched with the same concept.--- in fact setting up on daily NAV ( ICICI MF, Reliance, Birla platinum, etc).

So -- when i stop to think about this i just wonder why would companies give this gaurentee-- are they crazy or is there something in the fine print i have not read?

Here are some points.

1. It is widely believed that India will go through a bull market for many years to come

2. The fund manager would obviously have a lower risk portfolio than what other MFs may have. -- which means that if the market go up 100%, then this fund would be much lower--- but hey , thats what you pay in a gaurenteed fund.

So where all would this kind of an investment be useful?

Some rules here

1. This needs to be long term -- as all ULIPs are

2. The Gaurentee is great for savings for certain reasons which are fixed-- children's marriage, kids education

3. If there is an option in the ULIP please use the growth option ( max equity).

So- Great opportunity for people to invest ( although the initial take out fom the initial investment is quite huge)

Evaluate well

Happy Investing!