Systematic Investment Plan (SIP)

The SIP details come next. SIP is an acronym for "systematic investment plan." A typical SIP involves investing the same amount of money each month for as many years as possible. An example of a SIP would be investing BDT 1,000 in the IDLC Balanced Fund on the first of each month for as many months as possible. Consider SIP to be a method of investing in stages. SIP is arguably one of the most significant financial innovations, and it has a number of advantages.

The process of investing in IDLC SIP is shown below:

  • Flexibility: Investor can start SIP with a very small amount that is 1,000/2,000/3,000/4,000/5,000 or multiple of 500 / 1000. One can also increase/ decrease the amount being to be invested in regular fashion.
  • Flexible SIP Tenor: The SIP will be offered for at least 2 years or any other higher period set by the AMC. However, the investor can select the duration of the SIP scheme to 3, 5, 7, or 10 years. The particular plan will mature at the conclusion of this period, at which point it can be redeemed or continued. If surrendered, no surrender fees or charges may apply, and the policy may offer the highest premium over the declared surrendered price at the time of surrender.
  • Buy at discount and Surrender at premium: SIP investor may buy units at a discount from Weekly “Investor’s Buy Price” offered to the normal investors. In addition to that, SIP investor may surrender at a premium of repurchase price offered to normal unit holders at maturity as per SIP brochure.

Riskometer

IDLC AML introduces “Riskometer” which is a graphical representation of the riskiness of the scheme. “Riskometer” will indicate how much risk an investor needs to assume when investing in the product. There are five levels of risk on “Riskometer”, ranging from low to high.

For example, IDLC Balanced Fund is categorized as moderately high on the meter. This is because the risk of equity can be softened to some extent through investment in fixed income securities and income generating equity.  

Remember, the antidote for ‘risk’ in the mutual fund world is ‘time’; hence the longer you stay invested in a mutual fund, the safer it gets.