Highlights:
- A form of enhanced Systematic Transfer Plan
- Invests a variable amount in the range of 0.1-5X of base STP amount depending on market scenarios
- Divides investment corpus such that market opportunities can be tapped efficiently
- Invest smaller installment when Valuations are Higher and Invest larger installment when Valuations are Lower
- The feature is based on 3S's – Seek the right opportunity, Seize the opportunity and Size the opportunity
Mumbai, August 06, 2021: ICICI Prudential Mutual Fund has announced the launch of an industry first feature known as ICICI Prudential Booster Systematic Transfer Plan (Booster STP). Booster STP is an enhanced Systematic Transfer Plan wherein unit holders, based on market valuations, can opt to transfer variable amounts from one source scheme to a designated target scheme at defined intervals. The Unit holder is required to provide a Base Installment Amount that is intended to be transferred to the Target Scheme. Booster STP can vary Installment amount from 0.1X to 5X of base installment amount based on Equity Valuation Index. Through this enhanced STP, a very small amount of base installment is invested when equity valuation is considered expensive. Conversely, when the valuation is considered cheap, the investment will be of a relatively higher value. For example, if the base installment amount is say Rs.1,00,000 then it invests anywhere between Rs.10,000 to Rs. 5,00,000 (0.1x to 5x) based on market valuation. The multiplier (0.1x to 5x) is arrived at on the basis of our time tested Equity Valuation Index.
Outcomes under Various Approaches of Investing
Journey of Investor B: Normal STP with Long Duration
Data as on 31st July, 2021. Past performance may or may not be sustained in the future. Above is only for illustrative purposes, actual results may vary.
Journey of Investor A: Normal STP with Short Duration
Data as on 31st July, 2021. Past performance may or may not be sustained in the future. Above is only for illustrative purposes, actual results may vary.
Journey of Investor C: STP with Variable Amount based on Valuation
Base Installment of Rs. 1,00,000. The investment value is total market value of source & target scheme over the designated period with CAGR return. Data as on 31st July, 2021. Past performance may or may not be sustained in the future. Above is only for illustrative purposes, actual results may vary.
Outcome Summary
For Illustrative Purpose Only. Data as on 31st July, 2021. Past performance may or may not be sustained in the future. Above is only for illustrative purposes, actual results may vary.
Speaking on the launch of the product, Mr Chintan Haria, Head- Product Development & Strategy, ICICI Prudential AMC said, “Booster STP leverages rupee cost averaging and value averaging by staggering investment through dynamic installment and dynamic tenure. Market valuation based on which the installment amount is decided is based on Equity Valuation Index.”
Through this feature, an investor can aim for proper sizing and can aim to take advantage of the right opportunity that present itself in a volatile market. As a result, this feature can be considered as a helpful for those investors with lump-sum money to invest and looking for optimal investment approach to invest for long term.
Potential Alpha Generation: Booster STP Strategy
Source: MFI Explorer, for normal & Booster STP CAGR returns are total return of Source & Target Scheme /index Nifty 50 Index, Nifty 500 Index, Nifty Midcap 150. The above returns are of benchmark index and do not indicate returns of any scheme
For further information, please contact Adil Bakhshi - 91-9920010203
Riskometer & Disclaimers:
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This facility should not be associated or confused with Systematic Transfer Plan, Value Systematic Transfer Plan, Flex Systematic Transfer Plan; all these are separate facilities provided by ICICI Prudential AMC Limited.
ICICI Prudential Booster Systematic Transfer Plan (“Booster STP”) is a facility wherein unit holder(s) can opt to transfer variable amount(s) from designated open ended Scheme(s) of the Fund [hereinafter referred to as “Source Scheme”] to the designated open-ended Scheme(s) of the Fund [hereinafter referred to as “Target Scheme”] at defined intervals. The Unitholder would be required to provide a Base Installment Amount that is intended to be transferred to the Target Scheme. The variable amount(s) or actual amount(s) of transfer to the Target Scheme will be linked to the Equity Valuation Index (hereinafter referred to as EVI). The EVI is derived by assigning equal weights to Price to Earnings (PE), Price to book (PB), (GSecx PE) and Market Cap to Gross Domestic Product (GDP) or such other factors as may be determined by the AMC from time to time. Details of EVI are mentioned in the Terms & Conditions of Booster STP.
The multiplier is the extent to which the base installment amount may vary. In case of Booster STP it will be within the range of 0.1X to 5X of the base installment. For example, on a base installment of Rs. 10,000, the investment amount can be from Rs. 1,000 (0.1X multiplier) to Rs. 50,000 (5X multiplier). The multiplier is decided based on the Equity Valuation Index; EVI is the Equity Valuation Index which is a proprietary model of ICICI Prudential AMC (Henceforth referred to as EVI). EVI is the Equity Valuation Index which is a proprietary model of ICICI Prudential AMC. The EVI is derived by assigning equal weights to Price to Earnings (PE), Price to book (PB), GSec* PE and Market Cap to Gross Domestic Product (GDP).
Please read terms & conditions in the application form before investing or visit www.iciciprumf.com. This facility should not be associated or confused with Systematic Transfer Plan, Value Systematic Transfer Plan, Flex Systematic Transfer Plan; all these are separate facilities provided by ICICI Prudential AMC Limited
