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ICICI Prudential MF has launched ‘Booster SIP’ which is similar to the systematic transfer plan (STP) except that in this case the transfer amount will vary depending on the market condition.
In ‘Booster SIP’, investors will have the option to start a SIP in any of ICICI Prudential's three debt schemes — ultra short-term fund, equity savings fund and floating interest fund. Post this, investors will have the option to choose any of ICICI Prudential's hybrid or equity schemes for automatic transfer of funds from the debt scheme.
The amount transferred from the debt to equity scheme will vary every month depending on the market condition and will range between 0.1X to 10X (with X being the SIP amount). The multiplier (X) will be decided based on a formula developed by the fund house.
The concept aims to allow investors to invest more in equity schemes during low valuation periods and vice versa.
“Booster STP leverages rupee cost averaging and value averaging by staggering investment through dynamic instalment and dynamic tenure. Market valuation based on which the instalment amount is decided is based on Equity Valuation Index,” Chintan Haria, Head- Product Development & Strategy, ICICI Prudential AMC said.
