What is a Smart SIP ?

NORMAL SIP: In a Normal SIP, an investor invests a fixed amount in a mutual fund scheme at regular intervals
SMART SIP: In a Smart SIP, the SIP installment varies based on market valuations

How does a smart SIP work ?

Chart showing how Smart SIP installment amount varies based on market valuations compared to a fixed Normal SIP amount

Table showing SIP investment multiplier based on market valuation levels - invest more when valuations are low, less when high

You SIP more when the valuations DIP more

Comparison chart of Normal SIP versus Smart SIP showing fixed installments in Normal SIP and variable installments in Smart SIP based on Nifty 50 TRI valuations

BAF Model table showing default, minimum, and maximum Smart SIP installment options based on valuation zones

Chart showing valuation zones from very cheap to very expensive with corresponding SIP multiplier percentages

*Investors also have an option to choose the Minimum and Maximum SIP Installment. Incase the investor does not indicate the choice of option then the fund will consider it under the Default Smart SIP option.

The above Investment is for illustrative purpose only and should not be construed as a promise on minimum returns and safeguard of capital. KMAMC is not guaranteeing or promising or forecasting any returns. SIP does not guarantee of any profit/loss in declining/ upward markets. Actual returns may vary.

How do we decide Valuation ?

BAF Net Equity Allocation chart showing percentage allocation over time used to determine market valuation levels

KBAF Model chart showing how the model determines valuation zones for Smart SIP installment calculation

This should not be construed as a promise on minimum returns and safeguard of capital. KMAMC is not guaranteeing or promising or forecasting any returns. SIP does not guarantee of any profit/loss in declining/ upward markets. Actual returns may vary. KBAF model is the inhouse model used to determine the net % of equity allocation for Kotak balanced advantage fund

How is it different from Normal SIP ?

Source: Internal Research KMAMC. Data Period: 1st Aug 2018 - 29th Sep 2023. For illustration purpose, the above details showcases the scenario of how a Normal SIP and Smart SIP would have worked. We have assumed an SIP amount of Rs. 50,000 and then increase and decrease based on net equity allocation of KBAF. The above Investment is for illustrative purpose only and should not be construed as a promise on minimum returns and safeguard of capital. KMAMC is not guaranteeing or promising or forecasting any returns. SIP does not guarantee of any profit/loss in declining/upward markets. Actual returns may vary.

Benefits of Smart SIP

Aims to take advantage of market movements without hassles

Removes emotion from the decision making process

Rupee cost averaging plus value averaging

Features of Smart Facility

Also Available for Systematic Transfer Plan (STP)

SMART SIP

SMART STP

Schemes allowed

All open ended Equity Schemes + Index Fund (Equity) + Kotak Aggressive Hybrid Fund

STP From (Transferor Schemes): All Debt Schemes + Index Fund (Debt) + Kotak Arbitrage Fund + Kotak Debt Hybrid + Kotak Equity Savings Fund.

STP To (Transferee Schemes): All open ended Equity Schemes + Index Fund (Equity) + Kotak Aggressive Hybrid Fund

Frequency

Monthly/Quarterly

Monthly / Quarterly

SIP/STP Date

Any Date i.e. (1st to 30th/31st of a given month) on Monthly/Quarterly option

Other Points

Smart Facility is applicable only for growth option
Minimum SIP/STP instalment will be as per scheme SID
The first Smart SIP/STP instalment will be processed as per the Regular Smart SIP/STP instalment
If Investor has specified Minimum/ Maximum amount as well as ticked the option for Default Smart SIP, then trigger will be as per the Default Smart SIP/STP Amount