Ordinary investors always have a tough time choosing a mutual fund scheme that suits their risk and return profile from hundreds of similar-sounding schemes available in the industry. ING Optimix Financial Planning Fund is an attempt to provide a solution to such investors. It is an open-ended fund of funds scheme that aims to generate returns by investing in mutual fund schemes across fund houses as per the risk and return profile of the investor. The scheme offers four plans – cautious, conservative, prudent and aggressive – based on various degrees of risk. Each of the plan will invest in mutual fund schemes across fund houses that invest in four asset classes – equity, bonds, gold and money market securities.
In the aggressive option, the fund manager will invest 63-77% of the money in equity funds, 13.5% -23.75% of the money in liquid and money market funds, 9%-19.25% in debt funds other than liquid funds, gold exchange traded fund (4.25%-14.5%) and money market securities (0-10.25%). This asset allocation is expected to bring in the best risk-adjusted returns to an aggressive investor over the long run. Choosing the right funds, tracking them and balancing the portfolio at regular intervals will be done by the fund manager.
To bite into the opportunity, the minimum that you need to invest is . 5,000. You can choose to invest through a systematic investment plan (SIP). Each plan offers two options – dividend and growth. The new fund offer closes on May 3, 2011. Please note that the fund charges an exit load on all plans for an early exit. For example, a 3% load will be charged for an exit within one year from the date of allotment of units if the money is invested in a prudent and aggressive plan. Other plans under the fund also charge exit loads. The fund enjoys the treatment of debt fund for taxation purposes. Short-term capital gains are taxed at marginal rate of tax. Long-term capital gains are taxed at a lower of 20%, post indexation, and 10% without indexation.
