On November 30 2011, I invested ₹10,00,000 in the Kotak Single Invest Plan. As of 18 September the fund value was approximately ₹17,51,000. 100 per cent of the funds are in Classic Opportunities Fund. Even though this ULIP provides an insurance cover of ₹50,00,000, I already have a term cover of ₹1 crore. Hence I am not dependent on this saving for my insurance needs. My question is two fold:
I'd love to hear your assessment of this investment's performance.
Will wait to hear from you folks.
Thanks a bunch!
- Taneia Bhardwaj
This is a rare case where a ULIP investment has delivered good returns. The Classic Opportunities has performed well. You invested at the time of launch of this policy. This fund has outperformed its benchmark (BSE 200) across market downturns and upturns. As on August 28, 2014, the fund has generated a 12.6% annualized return since inception as against 9.4% generated by its benchmark. The basic problem with ULIPs are their huge charges which reduce the returns. This policy addresses this issue by charging lower costs. For a single premium of ₹5 lakh and above, there is a one-time premium allocation of 1% which was deducted at the time of your purchase. The policy administration charge is 0.10% per month on single premium for the first five years, thereafter the charge is nil. The fund management charge is capped at 1.35% and there is a mortality charge for the insurance component. You are about to complete five years of holding this policy. You may continue with it further provided you have no goal approaching. If you have a goal coming up in the next three to four years, you may start switching your investment gradually to a safer fund like bond fund or gilt fund to lock in the returns. But you may remain invested if you do not need this money in the near future.
This article was originally published on October 28, 2014.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
