AMC Speak

Diversification + Appreciation + Tax Free Income

Amar Shah, Head - Retail Business, ICICI Prudential AMC

28th October 2017

In a nutshell

ICICI Prudential's Multi-Manager Classic Dividend Plan is tailored for investors who want it all: diversification + appreciation + tax free income. Diversification across equity categories and styles is achieved through 3 pre-selected plans of 4 funds each that investors can choose from. The funds pay out annual dividends, but in different quarters, thus enabling investors to receive quarterly dividends from their chosen basket of funds. And convenience of investing in SIPs through a single cheque across the basket makes the proposition operationally simple. Amar takes us through the construct of the 3 different plans under these "all-in-one" solutions from ICICI Prudential.

WF: What is the genesis of the idea of creating three bouquets of equity schemes under your Multi-Manager Classic Dividend Plan?

Amar: Investors in general have a requirement of diversification, capital appreciation andtax free income. And for the nuanced investor, he/she may even look at mechanisms which undertake profit booking at regular intervals such that one's recommended asset allocation stays intact. By its very construct, Multi-Manager Classic Dividend Plan (MMCDP) provides asset allocation, diversification across categories coupled thereby mitigating concentration, all leading to wealth creation. With this feature, the investor can also gain periodic income through dividends.

Diversification of Portfolio

As can be seen form the presentation below, by investing in Multi-Manager Classic Dividend Plan one gets instant access to category and investment style diversification.

There are three plans available under this feature, namely Plan A, Plan B and Plan C.

Disclaimer: The information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors. Dividend is subject to distributable surplus and approval of trustees; IPRU - ICICI Prudential

Disclaimer: The information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors. Dividend is subject to distributable surplus and approval of trustees; IPRU - ICICI Prudential

Benefits of investing via this feature:

1. Diversified Across Scheme Category

2. Diversified Across Investment Style

3. Mitigation of Concentration Risk

4. Dividend Income from Respective Schemes

5. Dividend transfer plan to any open-ended scheme

WF: How did you arrive at the specific combinations of Schemes within Plans A, B and C?

Amar: The combination of Schemes for various Plans available has been made keeping in mind the diversification a portfolio requires and the risk profile of the investors. For example: Plan C is for an aggressive investor wherein there is diversity in the type of investment but is largely thematic in nature.

WF: In what way is transacting facilitated under these bouquets of Schemes?

Amar: One can invest either by SIP or lumpsum.

Lump Sum

Application amount for Lump Sum investment - Rs.1,00,000/- and in multiples of Rs.4/-thereof.

SIP

Monthly Frequency: Rs. 10,000/- and in multiples of Rs.4/- thereof (Minimum number of instalments: 6)

Quarterly Frequency: Rs. 30,000/- and in multiples of Rs. 4/- thereof (Minimum number of instalments: 4)

WF: Can you take us through the Dividend Transfer Plan facility?

Amar: Dividend Transfer Plan facility is such that the dividend obtained by investing in Multi-Manager Classic Dividend Plancan be transferred to any other open ended schemes.For example, dividend from IPRU Focused Bluechip Equity Fund under MMCDP - Plan A cannot be triggered to any of the scheme in Plan -A, but can be transferred to any other open ended schemes. So, one can choose to transfer the dividends into a debt or open ended equity scheme based on one's financial requirements.

On the functional aspect, one's investment is divided equally between four schemes and all four schemes offer dividend once a year, but in separate quarters. Hence, you may receive dividends four times a year.

WF: In the SIP route, do investors have an option to change the allocations to specific Schemes - for example, increasing the SIP allocation to BAF when valuations turn very rich?

Amar: The allocation will remain fixed and cannot be changed. Given below are the Sip returns of each of the Plans for the past 1, 3, 5, and 10 years.

SIP Returns - Multi Manager Classic Dividend Plan - Plan A