Prudential ICICI MF launches Dynamic Plan

Mumbai: Prudential ICICI Mutual Fund, Indias largest private sector mutual fund, has launched a new scheme, PruICICI Dynamic Plan, which facilitates active participation and investment agility to make the most of market conditions.

The Indian stock markets are increasingly sector-driven. Over a period of time, the indices may show a gradual increasing decreasing or even range-bound trend. And there could be intermittent bouts of volatility. However, because the constituent sectors drive the overall indices (and the sectors might be few or many), investors need an investment solution with the flexibility to invest across sectors based on their attractiveness at various points in time.

Also, if the situation calls for the need to be diversified, then the fund should also have the ability to diversify across various sectors. The PruICICI Dynamic Plan has the capability of making the most of these situations.

In case of a prolonged decline in the equity markets, the Dynamic Plan has the ability to switch to cash and / or debt instruments, which would attempt to arrest any further decline in the investments. Hence the investor need not stay invested in equities at all times, especially when the markets exhibit a prolonged decline.

In the case of an investor investing directly into equity, he faces a disadvantage due to the incidence of short-term capital gains tax, which can be as high as 30 per cent while booking profits on investments held for less than an year. (Active management of equity portfolios by investors directly investing in equities requires regular profit booking, which leads to short-term capital gains.)

By investing in the Dynamic Plan for over an year, the investor not only gets the advantage of active and astute equity management, but also the advantage of tax benefits, as the investor needs to pay only a minimal of 10 per cent tax on long-term capital gains.