Kotak Mutual Fund launches smart facility for SIP, STP, SWP
The Kotak Mutual Fund’s latest offering, the Smart Facility will help investors who are looking for an equity valuation-based investment approach to invest for their long-term goals
NEW DELHI: Kotak Mutual Fund on Monday announced the launch of smart facility for SIP, STP and SWP. With this, investors’ instalment (in case of SIP/STP) or withdrawal (in case of SWP) varies based on market valuation. The facility is available for all open-ended equity schemes, equity index funds and Kotak Equity Hybrid Fund.
The Smart SIP considers valuations and makes investments accordingly. The amount of investment or withdrawal is based on equity valuations - cheap, neutral and expensive. When valuations are expensive the default SIP instalment will be half (0.5x) of the base SIP amount and when valuations are cheap the instalment would be (2x) of the base SIP amount. This facility also allows investors to choose the minimum and maximum SIP amount.
Investors can also opt for this option through the Systematic Transfer Plan (STP) route.
The valuations are decided based on the net equity allocation of the Kotak Balanced Advantage Fund, which uses a combination of adjusted trailing Price to Earnings ratio (P/E ratio), and the trend as well as the sentiment data.
This platform is also available for redemptions through Systematic Withdrawal Plan (SWP). The Smart SWP allows investors to redeem a higher amount when equity valuations are expensive and a lower amount when valuations are cheaper.
Nilesh Shah, Group President & MD, Kotak Mahindra Asset Management Company, said, “The Kotak Mutual Fund’s latest offering, the Smart Facility will help investors who are looking for an equity valuation-based investment approach to invest for their long-term goals. Equity markets will continue to be volatile. Smartness is in using this volatility in our favour. This is a very simple yet powerful tool for systematic investments which is easy to understand and even easier to invest in. I am sure investors in coming days will benefit from this offering."
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