Mahindra Manulife Investment Management announced the launch of a new facility called “Power SIP” under the scheme(s) of the Mahindra Manulife Mutual Fund. This facility combines the features & benefits of a Systematic Investment Plan (SIP) and a Systematic Withdrawal Plan (SWP), enabling the investors to reap the maximum benefits of the power of compounding in the form of a steady flow of income.
Anthony Heredia, MD & CEO, Mahindra Manulife said, “We understand that financial independence is a fundamental aspiration for individuals and families. With the “Power SIP” facility, we have endeavoured to create a comprehensive solution that not only facilitates wealth accumulation but also ensures a smooth transition into the withdrawal phase. Through a systematic withdrawal plan (SWP), our customers may enjoy a regular income stream while still benefiting from the potential growth of their investments.”
With this facility, investors may now plan their investment journey by registering to a SIP and SWP together in eligible schemes of the fund for a specified duration. This facility is available in two options: Option A where both SIP and SWP are registered in the same scheme, and Option B where SIP and SWP can be registered in different eligible schemes.
“Option A” simplifies the process by allowing investors to choose the same scheme for both SIPs and SWPs. In this case, once the SIP tenure ends, the entire units accumulated via the “Power SIP” facility become available for SWP, ensuring a seamless transition between the investment and withdrawal phases. On the other hand, “Option B” takes the customization up a notch further.
The facility involves four distinct stages to facilitate a smooth transition from SIP to SWP:
First Stage: Investors register for a SIP in the eligible source scheme(s) of their choice for a predetermined period ranging from eight to 30 years, under monthly frequency.
Second Stage: After completing the specified SIP tenure, 80 per cent of the available units accumulated through the facility are switched to the selected target scheme chosen for SWP, based on the applicable net asset value (NAV) at the end of 15 calendar days from the date of the last SIP instalment (or the next business day, if the switch day falls on a non-business day). The remaining 20 per cent of the available units remain invested in the source scheme.
Third Stage: The SWP instalments will be commenced from the target scheme from the month following the month of completion of the SIP tenure. The SWP date will be the same as the SIP date.
Fourth Stage: Upon completion of three years after the initial switch transaction (as mentioned in the Second Stage), the remaining 20 per cent of the available units accumulated through the facility shall be switched to the target scheme at the applicable NAV on the date of the switch or the next business day if the switch day falls on a non-business day. This residual unit balance shall also be considered for processing monthly SWP instalments.
