“If Europe catches cold, India sneezes: that was a scenario once but not anymore”, an emphatic verbiage sprang and thence flowed from a very dynamic, Lakshmi Iyer, Chief Investment Officer (Debt) & Head Products, Kotak Mahindra Asset Management Co. Ltd. on her recent visit to this city to launch Long Term Income (LTI) scheme.
Carrying on in similar vein she said “only 0.4 % export will be affected and total bilateral trade between two countries is $14 billion – not a big issue”. The equities have taken a 10-15% dive but India will be least impacted as Britain is ranked 18th in export-partner list.
Compounding to that she mentioned that people are moving away from risky items to risk-free ones. This primed the ground for her to segue into her instrument. This LTI facilitates investors to redeem 0.75% of their investments at the prevailing Net Asset Value (NAV), on a monthly basis thus providing for regular cash-flow to those who want a predictable income to manage their expenses be it the retired or the currently working troupe who wants to supplant the income with assurance. “Thus, investors who are in need of regular cash flow and also, investors who are looking to generate a second source of cash flow apart from their primary source of income, such as salary or business income; can benefit from the Long Term Income (LTI) facility. We believe this kind of facility being offered through the mutual fund route aids in increasing the much needed retail participation in the industry.”, said Iyer.
It is quite flexible as investors can easily liquidate the funds, if needed and has exit load waiver for redemptions of up to certain limit. Investors availing the LTI facility can redeem up to 10% of the initial investment amount within one year, without any exit load. The 10% limit is applicable for Kotak Income Opportunities Fund, Kotak Equity Savings Fund, and Kotak Monthly Income Plan. In case of Kotak Medium Term Plan, investors can redeem up to 15% of the initial investment amount within 18 months, without any exit load. There is no exit load for Kotak Bond Fund.
The other salient feature being only realized earnings is subject to capital gain tax. Investors of Kotak Income Opportunities Fund, Kotak Medium Term Fund, Kotak Equity Savings Fund, Kotak Monthly Income Plan and Kotak Bond Fund can avail of the facility if their minimum investment is Rs. 2 lakh. LTI facility is available for investors investing in these schemes on or after June 1, 2016 and is available under growth option only.