The mutual fund (MF) industry is finding it tough to offer equity-linked schemes in the current volatile market. MF companies, with little recourse, have lined up debt-oriented products which offer returns which are in tune with returns offered by banks’ fixed deposits.
Going a step forward, fund houses, in a bid to expand the portfolio of their investors, have started offering new and innovative products by bundling MF schemes with insurance products and combining systematic investment plans (SIPs) with the insurance schemes.
Reliance Mutual Fund and Birla Mutual Fund have already introduced SIPs along with the term insurance plans. UTI MF will also announce unit-linked-insurance products (Ulips) along with their SIPs this week to attract investors. Senior officials from UTI MF said, “Within a couple of days, we are going to launch SIP-in-Ulip schemes, which will provide life insurance cover along with an SIP. It is for the first time that an SIP will be launched along with an Ulip. We are quite sure that this will benefit investors.”
The load applicable under this scheme will be same – the purchase load of 2.25% and redemption load of 2% if redeemed before maturity. Vikrant Gugnani, CEO, Reliance Mutual Fund, said, “We are trying to encourage investment by providing life insurance cover with SIPs. It has been only over two weeks that we have launched SIPs with insurance. But we are receiving enormous response from the retail investors as the markets are very bearish. By investing in these schemes, we are trying to create wealth along with protection for our investors and enable them to meet their financial goals in the future.”
In June, Birla Sun Life MF had launched Century SIP, an unique systematic investment plan offering an opportunity to create wealth with as little as Rs 1,000 per month plus a life insurance cover of up to 100 times the monthly installment.
