I notice that the ICICI Pru Pinnacle policies over 5 years have yielded about the same as NRE FDs. On a risk-adjusted basis, probably an inferior return (ignoring the protection part). Is this partly due to the high level of fees accruing to ICICI Pru?
If one is exposed to market risk for the PP policies, and assuming a 7.5% compounded return over the next 5 years for NRE FDs, is there any point in staying invested in these policies?
Thank you
S R Sharma
3 Answers
Dear Mr Sharma,
Not a right comparison : to compare an ULIP plan with FDs.
If one has an investment objective to accumulate wealth over the next 5 years, better option can be to consider investing in Mutual funds.
Dear Mr Sreekanth,
Thank you, the prompt response is much appreciated.
Just to clarify, the funds were invested 5 years ago in the ULIPs and may now be withdrawn. The choice is whether to keep the funds in the ULIP (Pru Pinnacle policies in this case) and take market risk etc - or withdraw them to invest in NRE FDs for defined, certain returns.
The question is; if the choice is purely binary, between these two options and on a risk-adjusted basis, does the ULIP make sense.
Best regards
Sami
Dear Sami,
If you have invested in 'Fixed Portfolio Strategy' of this ULIP, which primarily invests in debt securities, and if the returns are on par with FDs, my suggestion would be to consider investing in Debt mutual funds directly instead of this ULIP.
May I know your investment objective ? Are you looking for safe n fixed returns? What is your investment horizon?
Kindly read:
http://www.relakhs.com/best-debt-mutual-funds-india-top-debt-funds/
http://www.relakhs.com/best-monthly-income-plans-india-mutual-funds/
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