Kotak Mahindra AMC has announced the launch of Flex SIP/STP (F-SIP/STP), the mutual fund house said in a statement. 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 instalment 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 3 times 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, the note said. Historical evidence suggests it occurs only around 30 per cent of the time. Hence, it is unlikely to put undue pressure on the day-to-day finances of the investor.

Nilesh Shah, MD, Kotak Mahindra AMC, “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.

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