Recently, Principal Mutual Fund introduced an open-ended scheme called Principal SMART Equity Fund. Goal of the fund is generating long-term capital appreciation with relatively lower volatility through systematic allocation of funds into equity and in debt or money market instruments for defensive purposes.
An online news portal about business and economy – economictimes.indiatimes.com, writes about Principal SMART Equity Fund, “When the market turns expensive in terms of the P/E ratio, the scheme will reduce its allocation to equities and move assets into debt and vice versa.”
The portal gives an example also about it, “For example, if the P/E ratio of Nifty quotes below 16, the fund will be fully invested into equities and as the ratio rises the money will move into debt instruments. If the P/E ratio for Nifty goes above 28, the fund will completely move into debt instruments.”
Further the news portal elaborates the Principal Mutual Fund, “The equity component will have more of stocks that fall in the large-cap category. The debt component of the fund will be more into money market securities that are typically of short tenure. By employing a P/E-based strategy, the fund aims to take asset calls in a more disciplined manner with little fund manager bias. This is expected to help the fund to buy more of equities when the market quotes at lower levels and sell more of equities when the market climbs in valuations terms.”
About the investment planning, the news portal writes, “The minimum investment to buy into this opportunity is Rs 5,000. There is no entry load. The exit load is 2% if you decide to move out of the scheme before completing one year. It stands reduced to 1%, if you decide to move out before completing two years. If you remain invested for more than two years there will be no exit load.” It is just like Mobile Investment Manager.
