Pramerica Mutual Fund introduces Power SIP under two schemes

Pramerica Mutual Fund has decided to introduce Power SIP under Pramerica Ultra Short Term Bond Fund and Pramerica Equity Fund effective from 1 December 2011.

Pramerica Power SIP:

Pramerica Power SIP is an investment plan that provides for subscriptions into Pramerica Ultra Short Term Bond Fund (hereinafter referred to as the source scheme) in a lump-sum and via monthly SIP and subsequently switching the investment into Pramerica Equity Fund (hereinafter referred to as the target scheme) on a recurrent basis on 2nd business day of every month.

While the monthly SIP instalments in the source scheme would be inform, the amount of switches into the target scheme would be based on a value derived at the end of each month using a proprietary model developed by the AMC based on BSE Sensex PE ratio (herewith referred to as Pramerica Multiplier). For this purpose the PE mean is calculated taking a weighted average of the average PE of BSE Sensex since 1991. The PE mean is then compared with the current BSE Sensex PE and based on the variation between the two, Pramerica Multiplier is determined. The Pramerica Multiplier could range from 0 to 4 and accordingly, the switch amount into the target scheme each month could vary from Nil to 4 times the monthly SIP instalment in the source scheme.

Minimum initial (lumpsum) investment in source scheme: 12 times the monthly SIP instalment in source scheme.

Minimum SIP instalment in source scheme: Rs. 1000 per month and in multiples of Rs. 500 thereafter.

Minimum SIP tenure in source scheme: 36 months.

Whenever the value of investment in source scheme falls to less than 6 SIP instalments, the investor would have to replenish (top up) the investment in the source scheme by making additional subscription equal to minimum 6 SIP instalments. If the balance is less than applicable switch amount in the target scheme, the entire balance in source scheme would be switched out to target scheme

Source: http://www.indiainfoline.com/Markets/News/Pramerica-Mutual-Fund-introduces-Power-SIP-under-two-schemes/4056071019