SBI Smart Performer - Is it a good time to enter at lowest NAV?

Discussion in 'Mutual Funds Discussion Forum' started by garyshah, Feb 2, 2011.

  1. garyshah

    garyshah New Member

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    SBI smart performer looks great currently as the current NAV as of today for daily protect fund is 9.31 and the highest NAV is 10.73 which was back in November. If I enter today, I am already getting around 15% of return as my NAV will be locked at 10.73 though I enter at 9.32.
    In there benefit illustration chart, I am already getting my money at least 4 times in 10 years at 15% after deducting all the charges.
    Am I missing anything here?
     
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  2. reamer

    reamer New Member

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    experts, please suggest...
     
  3. asterix24

    asterix24 Active Member

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    Friends,

    Disclaimer: I am not a big fan of ULIPs and you will find out why :)

    Pardon my limited knowledge on these "Highest NAV over last some N Years" schemes. If my understanding serves me right, these ULIP Schemes "promise" to return the highest NAV over last 7 years or so. Frankly, I have only seen the launch of these schemes, but am yet to meet someone who has benefited from the same. If there is someone who has actually liquidated the returns, I would love to hear from them.

    Your calculations look to be fine and theoritically, if the ULIP does return the numbers as promised and explained by you, you do stand to gain. However, as I said earier, I would realy look forward to someone who has got the returns.

    Hence, I come to my basic question. What is your motivation for going for a ULIP? If it's combined insurance and growth, I have a honest question to ask. AFAIK, you get limited cover for a huge premium and I am not even comparing the Term Insurance schemes. Consider this: For a 22 year old, you can get good-old endowment insurance for Rs. 1 Lakh Sum assured from LIC for around Rs. 4950 per year. For the same cover, you may land up paying around Rs. 20000. For Term insurance lovers, you may find that for around Rs. 20000, you may get a cover of around 1 Crore or atleast 50 Lakhs if am not wrong.

    Your premium doesn't directly translate to investment. From a mortality charge to annual maintainance charge to fund maintainence charge, your money is reduced periodically. Hence, the actual amount you actually land up investing is reduced.

    My personal recommendation would be go for insurance products for your cover and go for MF for investments. However, I would definitely recommend you to take a judgement call at the end.

    Happy Investing !!
     
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  4. garyshah

    garyshah New Member

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    My primary purpose is just an investment in smart performer. not much attracted towards the insurance it covers. Also I am getting a sureshot return of around 17% CAGR as I am getting the highest NAV (10.73) though current price is again reduced to 9.28 as of Friday.
     
  5. 2021

    2021 Active Member

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    ULIPs can't be without catch. It's purpose is financial secuirty and not investment. Hence there has to be some catch which you haven't seen yet. Let me show you!

    SBI Smart promises highest against blah blah navs. What it do is I'll explain by an example. Suppose they have 10 bucks. They will put 5 in bonds, secured debts etc and 5 in equity. Now as and when 5 of equity becomes 5.01, 0.01 will go to a fund called Daily Protection Fund. And now comes the catch!

    You can very well surrender policy any day after 1st 15 days free lock-in trial preiod. But only after deducting charges which I'll be quoting too and with a clause that the total benefits after charges shall be locked and will be given 3.5% P.A. simple interest for time frame of 5 years total of policy! You can take money out only after 5 years.

    If you gave 100 bucks you get 10 units, charges comes out to be 25 (approx) in 1st year for which 2.5 units are deducted and if on surrender nav was 11, you'll have 7.5x11=82.5 locked for 5 years on which simple bank deposit rate will be paid. Now more horrendous part which most people don't see while taking insurance if there aim is investment! The charges -

    Premium allocation charges : 15% in 1st yr, 5% for next 2-4 yrs for 3-5 yrs terms respectively.
    Admin charges – Rs 60/- per month for full term.
    For first three years, annual administration charges of Rs 5 per 1000 of sum assured.
    Fund management charge 1.5% pa. Fund management charge can be increased to 2.5% pa
    Mortality charge levied on 1st day of each policy month.

    Now take your call. :)
     
  6. 2021

    2021 Active Member

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    Going through posts again, sorry I missed main question. You have to invest and not surrender. Now you have fine prints which you have not seen before and no insurer will show you either.

    If your aim is to invest, invest in MFs, sip or lumpsum. They don't charge 60 per month till you sip or 1.5% and 15% pa and many more hidden charges which ulips never show even after irda says so.
     

  7. padmanesh

    padmanesh New Member

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    This is the nice time to enter Smart Performer Plan in SBI Life... Because now the daily protect fund3 NAV value is 9.50 today(18/5/2012)...But the highest NAV value already recorded as 10.73...
    For example we enter today as the minimum amount of investment 50000/annum means,
    ((50000-charges)/9.50)*10.73= min 6000/- profit or growth immediately....


    Further Clarification, Please feel free to contact me 7200345667
     

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