A smart investment facility to benefit from market volatility effectively
Kotak Mahindra Asset Management Company announced the launch of Flex SIP/STP (F-SIP/STP). This smart investment facility allows investors to take advantage of market movements by investing higher when the markets are low.
The F-SIP/STP is based on the trailing Price-to-Equity ratio (P/E) of Nifty 50 Index. The amount to be transferred on each installment of Flex SIP will be determined on the basis of the P/E band of Nifty 50 Index.
- If the P/E ratio is greater than 15, then the specified amount gets invested
- If the P/E ratio is less than or equal to 15, then:
- The default amount which is 3x the F-SIP amount or
- The specified amount in the application form
Valuation wise, the P/E ratio of Nifty 50 Index at 15 is an attractive or cheap zone. Therefore, investing more in this phase will ensure better wealth creation over a period of time. Historical evidence suggests it occurs only around 30% of the time. Hence, it is unlikely to put undue pressure on the day-to-day finances of the investor.
Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company said, “Recent trends in investor behavior have been very encouraging. It is a right time now for Indian investors to efficiently participate in the Indian capital markets.”
He further added, “By introducing Flex SIP (F-SIP/STP), we are going a step further to help our investors better utilize market volatility. F-SIP/STP is an investment facility that enables investors to get more out of their SIP investments. F-SIP/STP allows the investors to take greater advantage of the market valuations, which is the genesis of sound investing fundamentals. This in turn will help them achieve their investment goals.”
F-SIP/STP is available under the monthly and quarterly options. A minimum of six instalments for enrolment under this option is required. It is a simple and effective way to invest in equity markets.
About Kotak Mahindra Asset Management
Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary of Kotak Mahindra Bank Limited (KMBL), is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started operations in December 1998 and has approximately 7 lakh investors in various schemes. KMMF offers schemes catering to investors with varying risk – return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities. The company is present in 76 cities and has 79 branches.