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K.R. Srivats

New Delhi, May 9 Max New York Life Insurance Co Ltd (MNYLI) has no plan to offer sectoral funds as investment options for its policyholders even as it expects unit linked insurance plans (ULIPs) to continue to be a preferred choice of product among customers.

There will, however, be increased choices of investment funds (other than sectoral funds) under ULIPs for customers in the coming days, according to Mr Sunil Kakar, Director-Finance & CFO, MNYLI.

For instance, the company has introduced a new fund called the dynamic opportunities fund (Price Earnings multiple-linked fund) under ‘SMART Assure’, a recently launched ULIP. Currently, the total equity exposure of MNYLI is a little over Rs 1,200 crore, out of total funds under management of about Rs 3,800 crore. The total funds garnered under ULIP till date is about Rs 1,800 crore.

“Till date, we have not offered any sectoral funds because they are more riskier. The philosophy that you will see from us (as insurance company) is safety and security first and then when proven track record comes through, we may offer a slightly higher risk investment fund option,” Mr Kakar told Business Line.

ULIPs, which has caught the fancy of investors in the recent years, is not equity linked product, but one that offers choice of equity exposure from 0 to 100 per cent, Mr Kakar pointed out. He emphasised that insurance funds are different from mutual funds in terms of the tenor of investment and this subtle point needed to be understood by people.

Diversified call

Mr Prashant Sharma, Vice President (Investments), said that MNYLI does not want to offer sectoral funds as the money that comes was mostly long term in nature. “As a belief, we don’t want to offer sectoral funds as the sectors may change. Some sectors may be the flavour of the season today. Overnight this could change and we don’t want customers to get caught in that. We would rather keep it more diversified for the policyholders.

“If the customer is not savvy enough to follow the market and the economy on a regular basis, then he will have a problem with sectoral funds. This, we will like to avoid for now. As of now, a diversified equity play is the best option for customers.”

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