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Kotak Mutual Fund has launched a new feature through which investors can make changes to SIP, STP and SWP instalment based on market valuation i.e. they can reduce SIP instalment of equity funds when markets are overvalued and vice versa.
The new feature titled ‘Smart Facility’ is applicable on all open-ended equity schemes, equity index funds and Kotak Equity Hybrid Fund.
Kotak MF will look at valuation metric of 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 to arrive at market valuation.
The amount of investment or withdrawal will be based on equity valuations – Cheap, Neutral and Expensive. When valuations are expensive, 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.
In a press release, Nilesh Shah, Group President & MD, Kotak Mahindra AMC said, “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.”
