Motilal Oswal Asset Management Company (AMC) has announced a new feature in its systematic withdrawal plan (SWP), named as the Motilal Oswal Fixed Amount Benefit (FAB) plan.
The new FAB plan is designed to empower investors with more control in planning their long-term financial goals and lifestyle choices thereafter.
FAB will offer a product to investors that is easy to enrol in, while offering a completely digitised dashboard along with a detailed calculator for customising their cash flow requirements, Motilal Oswal AMC said in a press statement.
“FAB enables investors to withdraw the regular sum of their investments at a fixed percentage and predefined frequency of their original investments, irrespective of the movement in the market value of their investments. The balance component continues to generate returns, which provides tax efficiency as well as wealth generation relative to other investment avenues,” Motilal Oswal AMC said in a statement.
The investor can start with a minimum withdrawal amount of Rs 500 per month or above depending on his/her cash flow requirement. The frequency can either be monthly, quarterly or annually.
According to Motilal Oswal AMC, the withdrawal rate has been kept at 6 per cent as a default, but the investor can increase it to either 8 per cent, 10 per cent, or 12 per cent per annum. The default withdrawal date is set for the 7th of every month, but investors have the option to change it to the 1st, 14th, 21st, or 28th of every month.
According to Motilal Oswal AMC, a fixed amount of income every month will help the investor to incur fixed monthly expenses and accordingly manage their lifestyle.
“With this plan, the investor would not only benefit from fixed income every month, but also wealth generation over the long term,” Motilal Oswal said in the press release.
Navin Agarwal, managing director and CEO, Motilal Oswal AMC said in a statement: “Retirement planning can be a daunting task, but with the right investment strategy, it can secure financial stability for your golden years. FAB provides an excellent option for not only retirees, but also other investors seeking a reliable source of income, with the potential to generate steady returns on their investments. However, to make the most of this investment opportunity, investors must educate themselves on the intricacies of mutual fund returns and the necessary withdrawals for sustaining their desired lifestyle. By combining other securities with an SWP, people can maximise their investment returns and minimise risks, thus ensuring a comfortable and worry-free retirement.”
Akhil Chaturvedi, chief business officer, Motilal Oswal AMC said: “The key feature of the FAB Plan is that it helps an investor to aim for an enhanced investment experience over traditional instruments. The design of the plan enables fixed withdrawal amount irrespective of short-term market fluctuations, and generating returns on the balance capital with tax efficiency as added advantage.”
