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Need Opinion on Kotak Smart Advantage Plan

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  #1  
Old 26th February 2009, 11:24 AM
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Default Need Opinion on Kotak Smart Advantage Plan

I am planning to invest in Kotak Smart Advantage Plan through SIP
My investments would be 2000-3000 per month for about 3 yrs and beyond.

Since I hold a salary account in Kotak Bank the agent told me that there would be 0% charges and at the end of 3 yrs i would be able to withdraw the whole or part of the amount invested without any charges.
Is this verifiable?

Can anybody tell me about the pros and cons of investing in this plan as i am a first time investor? My main aim is tax saving and a decent rate of return

http://www.kotaklifeinsurance.com/ve...-advantage.htm



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  #2  
Old 26th February 2009, 01:16 PM
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Default Re: Need Opinion on Kotak Smart Advantage Plan

Kotak Smart Advantage is ULIP (Unit Linked Insurance Plan).

People generally don't opt for these kinds of plans. There are plenty of reasons against it. They tend to have higher expense rations and hidden costs. Your agent gets a nice fat commission out of it so his opinion is always going to be biased.

There are lots of articles, blogs, forum threads on ULIP v/s Mutual Funds, looking through this forum and googling should get you acquainted with all the pros and cons. Most people are skeptical of plans that combine insurance and investments. Instead the recommended route is to take term insurance and invest in mutual funds for higher rate of returns.
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  #3  
Old 28th February 2009, 04:41 PM
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Default Re: Need Opinion on Kotak Smart Advantage Plan

yes insurance n investment should not be mixed.if u need insurance then go for term cover n not ULIPS.for pure investments go for MF's or stocks.
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  #4  
Old 21st March 2009, 09:55 AM
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Default Re: Need Opinion on Kotak Smart Advantage Plan

Quote:
Originally Posted by lonsharim View Post
Kotak Smart Advantage is ULIP (Unit Linked Insurance Plan).

People generally don't opt for these kinds of plans. There are plenty of reasons against it. They tend to have higher expense rations and hidden costs. Your agent gets a nice fat commission out of it so his opinion is always going to be biased.

There are lots of articles, blogs, forum threads on ULIP v/s Mutual Funds, looking through this forum and googling should get you acquainted with all the pros and cons. Most people are skeptical of plans that combine insurance and investments. Instead the recommended route is to take term insurance and invest in mutual funds for higher rate of returns.
Hello Lonsharim,

I am hopeful that you will be able to point me in the right direction.

I have an objective: Want to put money in MF that'll provide at least 20% p.a. at intervals of every couple of months or so. This return has a role. It will be further invested in scrips of my choice. Having tad-bit of know-how in that field I am pretty sure of making good investment. <why wont I invest that capital in my scrips to begin with, is a different line of questioning >

The question I pose to you is: What type of MFs are best suited for giving 20% returns at intervals? Nevermind the taxation or entry load etc. Focus is, that there have to be returns coming in every 2/3 mths. Cannot have them paying 50% after 18 mths... this wont work.

Please advice to the best of your knowledge. Also, which is a good website for MF research. I have mutualfundsindia. com
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Old 22nd March 2009, 02:51 PM
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Default Re: Need Opinion on Kotak Smart Advantage Plan

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Originally Posted by jamit_05 View Post
Hello Lonsharim,
The question I pose to you is: What type of MFs are best suited for giving 20% returns at intervals? Nevermind the taxation or entry load etc. Focus is, that there have to be returns coming in every 2/3 mths. Cannot have them paying 50% after 18 mths... this wont work.

Please advice to the best of your knowledge. Also, which is a good website for MF research. I have mutualfundsindia. com
ValueResearchOnline is a good site for MF research. They also have a good subscription based magazine.

Regarding 20% returns - that would rule out all equity based MFs. Pretty much all of them have recorded negetive growth for the last 12 months.
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  #6  
Old 23rd March 2009, 10:03 AM
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Default Re: Need Opinion on Kotak Smart Advantage Plan

Quote:
Originally Posted by lonsharim View Post
ValueResearchOnline is a good site for MF research. They also have a good subscription based magazine.

Regarding 20% returns - that would rule out all equity based MFs. Pretty much all of them have recorded negetive growth for the last 12 months.
Point well taken.

With that said, could you recommend MFs that specialize in booking profits (at every rise). I do not want them to grow my money or portfolio. But, just paying be back at every rise.

Any reco. from personal experience will be most appreciated.

Tks.
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Old 23rd March 2009, 08:56 PM
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Default Re: Need Opinion on Kotak Smart Advantage Plan

Quote:
Originally Posted by jamit_05 View Post
Point well taken.

With that said, could you recommend MFs that specialize in booking profits (at every rise). I do not want them to grow my money or portfolio. But, just paying be back at every rise.

Any reco. from personal experience will be most appreciated.

Tks.
I think what you may be looking for is aggressively managed funds. Am not sure what you mean by paying back at every rise, because MFs don't do that. They declare dividends periodically and the other option would be for you to redeem some of your units as the NAV value of your investments go high.

Regarding booking profits, MFs do that to a certain extent regularly. Here is a simple example. Funds don't like over exposure to any single stock in their portfolio. Say Reliance is 5% of a MF portfolio and the stock rises. The MF would strongly consider selling of a portion, book profit and maintain the old ratio. Should the stock fall, they will buy and maintain the ratio. At no point would they rejig their portfolio completely.

Also you need to know that most MFs these days have
- increased their large cap exposure and reduced their mid/small cap investments with the expressed aim of reducing their losses.
- Have large cash reserves because they want to wait and watch

Aggressively managed funds churn their portfolios more than others and are therefore more volatile. How can we find such funds? Their standard deviation will be much higher than other funds. You should be able to research that on ValueResearchOnline.
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  #8  
Old 26th March 2009, 02:18 PM
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Default Re: Need Opinion on Kotak Smart Advantage Plan

Quote:
Originally Posted by lonsharim View Post
I think what you may be looking for is aggressively managed funds. Am not sure what you mean by paying back at every rise, because MFs don't do that. They declare dividends periodically and the other option would be for you to redeem some of your units as the NAV value of your investments go high.

Regarding booking profits, MFs do that to a certain extent regularly. Here is a simple example. Funds don't like over exposure to any single stock in their portfolio. Say Reliance is 5% of a MF portfolio and the stock rises. The MF would strongly consider selling of a portion, book profit and maintain the old ratio. Should the stock fall, they will buy and maintain the ratio. At no point would they rejig their portfolio completely.

Also you need to know that most MFs these days have
- increased their large cap exposure and reduced their mid/small cap investments with the expressed aim of reducing their losses.
- Have large cash reserves because they want to wait and watch

Aggressively managed funds churn their portfolios more than others and are therefore more volatile. How can we find such funds? Their standard deviation will be much higher than other funds. You should be able to research that on ValueResearchOnline.
Thank you for the write up.
Tks for sharing your immense knowledge about MFs.
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  #9  
Old 4th May 2009, 12:24 PM
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Default Re: Need Opinion on Kotak Smart Advantage Plan

i want to invest 50k... wht should be the break up... if i want to invest in Mutual Funds.. ??


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