Birla ULIP - Income Advantage Fund

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harikc_hyd asked 9 years ago

Hi Srikanth, 10 days ago i have moved my ULIP - Birla Equity Maximizer to Birla Debt Income Advantage fund but within 10 days my amount got less by 15 thousand. As from fund people told move to debt when equity is in high. on Feb 2 i moved 2 lakhs but now it is 1.9 lakhs. How can amount got reduced, they told in debt u r principle is safe. please can u kindly ansswer/explain me in detail Thanks in advance Hari

3 Answers

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Sreekanth Staff answered 9 years ago

Hi, In the last few months, the Debt funds have beaten badly due to the fact that RBI has not cut interest rates, as against the market expectations .. So, probably this can be the major reason for your debt fund's poor performance. Kindly note that Debt securities are also subject to certain types of risks and returns are not guarenteed. Kindly read : Types of Debt funds. May I know your investment time-frame?

Sreekanth Staff replied 9 years ago

Below is your reply, which you have posted as a seperate Question. As this is related to same Question, I am pasting it here in this thread itself…

“hi srikanth,

Thanks for your reply, we have invested in ULIP Birla Maximizer for 6years and to make our principle safe thought debt is safe made a switch from EQUITY: Maximizer to DEBT: Income Advantage Fund, this we did on 25th jan 2017 amount is 4,76,000 , upon curiosity when we checked the Fund value of the Debt Fund : Income Advantage, on Feb 8th 2017 they told us its 4,63,000. My Question was within short span of 13 days how can debt fund reduced by 13 thousand. Usually Fund house people say that Principle is safe in Debt Funds. Is this our lack of knowledge or what i am still not clear. But u r answers are good to know about these things.

As u asked our investment timeframe is another 3 to 4 years for this ULIP as it will reach 10years.

Please kindly advice further on this .

Regards,
Hari “

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Sreekanth Staff answered 9 years ago

Kindly note that it is relatively safe compared to Equity, but as mentioned in my previous answer, Investments in Debt funds too have certain risks associated with them. Also, kindly check if there has been any charges levied (ex- switch fee etc). Let's say, if you redeem these fund units, and would like to re-invest, what would be your investment time-frame then? Any specific financial goal?

harikc_hyd replied 9 years ago

Hi Srikanth, there is no switch fee for this and we would like to Reedem and do a new investment in other financial products. Total ULIPS value is around 8 lakhs my plan is 50% of it in FDs, another 50% in Mutual Funds. So my INVESTMENT TIME HORIZON is around 3yrs to 5yrs. When it is Mutual funds , my question is are there any Debt Funds where guaranteed returns are there it can be 7 to 8 % also OK for me , Or do u advice to split the 4lakhs equity and debt mixed mutual funds.

Please kindly let me know how to plan it properly for my 8 Lakhs.

Regards
Hari.

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Sreekanth Staff answered 9 years ago

Hi, Returns are not guaranteed in Equity or debt funds. However, kindly check out this option : Best Arbitrage Funds. You can also consider to invest a portion of investible surplus in Secured Non-Convertible debentures with a time-frame of say 2 to 3 years. Read: What are NCDs? Equity fund : You may consider a Large cap fund & one Balanced fund. Ex - Birla Frontline equity & HDFC Balanced fund. Read: Best Equity funds. List of best investment options.