Kotak AMC unveils smart SIP, STP & SWP tool for equity valuation-based approach
Premium- The debut of the Smart Facility for SIP, STP, and SWP for all investors has been announced by Kotak Mutual Fund.
The debut of the Smart Facility for SIP, STP, and SWP for all investors has been announced by Kotak Mutual Fund. This smart functionality goes beyond the standard SIP/STP/SWP option by allowing investors to vary their instalment (in the case of SIP/STP) or withdrawal (in the case of SWP) in accordance with the market valuation. All open-ended equity schemes, Equity Index Funds, and Kotak Equity Hybrid Fund are eligible for the new facility.
The Smart SIP takes valuations into account and makes investments as a result. With the new facility, investment and withdrawal amounts are determined by the equity valuations—Cheap, Neutral, and Expensive. When values are high, the default SIP instalment is equal to half (0.5x) of the base SIP amount, and when valuations are low, the instalment is equal to two times (2.0x) the Base SIP amount. One can also select a minimum and maximum SIP amount using this feature. The Systematic Transfer Plan (STP) plan is another way that investors might choose to go with this option.
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."
The adjusted trailing Price to Earnings ratio (P/E ratio), trend data, and sentiment data are used to determine the valuations based on the net equity allocation of the Kotak Balanced Advantage Fund. This smart feature is also accessible for redemptions via the Systematic Withdrawal Plan (SWP). The Smart SWP allows the investor to redeem a higher amount when equity valuations are high and a lower amount when valuations are low.
Kotak Mahindra Asset Management Company Limited (KMAMC) - a wholly owned subsidiary of Kotak Mahindra Bank Limited (Kotak), is the Asset Manager for Kotak Mahindra Mutual Fund (KMF). The company is present in 82 cities and has 87 branches as of 30th June, 2022.
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