NAME OF THE NFO
ING Investment Management India Pvt. Ltd’s ING Optimix Financial Planning Fund.
WHAT IT OFFERS
The scheme is a fund of funds (FoF) that will work as a multi-manager fund and aims to provide long-term capital appreciation to investors. The NFO will invest in liquid funds, debt funds, equity funds and gold exchange-traded funds (ETFs).
Investors can choose among four plans—cautious, conservative, prudent and aggressive. The cautious plan will have the highest exposure to debt among all plans, while the aggressive plan will have maximum exposure to equity. Investment in gold ETFs will be the highest in the conservative plan.
Generally, FoFs are biased towards the schemes of their own fund house. But that is not the case here. The NFO plans to invest into an array of schemes that are well-performing and come with a good track record.
The fund levies a high exit load but it is aimed at retaining investors for the long term. In case of prudent and aggressive plans, the exit load is as high as 3% if investments are redeemed within a year, 2% if redeemed before two years and 1% if redeemed within three years. The exit load in case of conservative plan is 1% if redeemed within a year and for cautious plan the exit load is 0.5%, if redeemed within six months.
Being an FoF, the expense ratio may be as high as 2.5%, the maximum permitted by the Securities and Exchange Board of India or Sebi.
Also, though this is a financial planning-type of a scheme, it does not allow automatic switches (say from an aggressive plan to a cautious plan as an investor grows older). So investors will have to decide on their own whether they want to switch from one plan to another. Moreover, if you are investing in an aggressive plan which will predominantly invest in equities, the scheme will still be treated as a debt scheme for taxation purpose implying that you have to pay higher taxes.
MINT MONEY TAKE
The FoF has a high cost structure. Investors can get similar asset allocation in hybrid funds at a much lower cost. Investors would be better off looking at other options.
NFO closes 3 May
Minimum lumpsum investment Rs 5,000
Minimum sip amount (monthly) Rs 1,000
Minimum sip amount (quarterly) Rs 3,000
Fund manager Arvind Bansal
Exit load Up to 3%