ARTICLE-ZONE

Five Ws of ICICI Target Return Fund

Om Sai Ram

What is target return fund?

In its diamond studded necklace, ICICI has added one more diamond that may outshine others. ICICI Prudential target return fund (TRF) is non-conventional first-of-its-kind scheme that allows investors to switch to pre-selected debt fund once the target, again selected by investor, is realized.

There are 4 trigger options – 12%, 20%, 50% and 100%. Investor gets the option to switch the whole amount or only the profit accumulated. If only appreciation is chosen for switch-out, the principal amount will remain invested in equity fund.

For instance, a person has invested Rs.10,000/- and chooses the trigger of 20%. The day the amount will become Rs.12,000/-, Rs.2000 will be switched to a debt fund scheme in appreciation switch option, while, the whole amount of Rs.12,000/- will be transferred in case of all-unit switch option.

Why should one invest?

In 2006 and 2007, mutual funds investors tasted some fantastic returns, more than 100% in some cases. But in 2008, all their profits eroded and their portfolio showed negative returns. Had they booked just the appreciation in 2007, they would have still been in profit. Here is where ICICI TRF shows its utility. It offers flexibility to safeguard interest accumulated by transferring it to safer (debt) funds deterring any fall in capital market eating away your profits.

Who should invest?

Although anyone can invest, this fund is tailor-made for those who are either first time investors or reluctant to invest in mutual funds because of risk attached to it. Wiser few who don’t want to loose the interest once generated will also show their keen interest in this fund.

When?

New fund offer is closing on 14^th May. Invest before that.

Where?

You don’t need to go anywhere. Just order mutual fund or download form or call-09910311120 and we will be at your disposal.