New Delhi: Kotak Mutual Fund on Monday announced the launch of smart facility for SIP, STP and SWP. With this, the installment (in case of SIP/STP) or withdrawal (in case of SWP) of investors varies depending on the market valuation. This facility is available for all open-ended equity schemes, Equity Index Fund and Kotak Equity Hybrid Fund.
Smart SIP considers the valuation and invests accordingly. The amount of investment or withdrawal is based on equity valuation – cheap, neutral and expensive. When valuation is costlier, the default SIP premium will be half (0.5x) of the original SIP amount and when valuation is cheap, the premium will be (2x) of the original 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.
Valuation is decided on the basis of net equity allocation of Kotak Balanced Advantage Fund, which uses a combination of adjusted trailing price-to-earnings ratio (P/E ratio), and trend as well as sentiment data.
The platform is also available for redemption through Systematic Withdrawal Plan (SWP). Smart SWP allows investors to redeem higher amounts when equity valuations are expensive and lower amounts when valuations are cheap.
Nilesh Shah, Group President and MD, Kotak Mahindra Asset Management Company, said, “The latest offering from Kotak Mutual Fund, Smart Facility will help investors who are looking for an equity valuation-based investment approach to invest towards their long-term goals. There will be volatility in the equity markets. The smartness is in using this volatility in our favor. It is a very simple yet powerful tool for systematic investing which is easy to understand and easy to invest in. I am sure It is hoped that investors will benefit from this offering in the coming days.”
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