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Wealth creation + contingency planning in a single solution

Raghav Iyengar, EVP & Head - Retail and Institutional Business, ICICI Prudential AMC

7th October 2016

In a nutshell

ICICI Pru's Medical Advantage Facility, which was originally offered along with its Savings Fund, has now been extended to a range of its popular funds including its flagship Discovery Fund and Balanced Advantage Fund, giving investors a chance to create wealth even as they provide for contingencies using the MAF facility. Raghav takes us though the MAF journey so far and the enhanced suite of solutions that are now on offer with MAF bundled in them, to make this proposition more relevant to a wider set of investors.

WF: How has the distribution and investor response been so far for the innovative Medical Advantage Feature that you launched early this year?

Raghav: Since the launch in March 2016, we have received a very strong response both from investors and distributors. We and have crossed about 6,500 enrolments and about 10 hospitalisation cases has been registered. The feedback, both from customers and distributors has been encouraging.

There are over 1,500 distributors that have recommended this feature. When it comes to the quality of investment, we have seen investments moving from as low as Rs. 30,000 to Rs 1.5 lakh per folio. Some of the investors have increased the investment amount as well. Along the journey, we have received valuable feedback which helps us understand market requirements further. We have made best attempt to include this and launched additional enhancements to this feature.

To recap this feature please find below....


WF: Are there any insights you can share in terms of profile of investors who are opting for MAF? Is there a trend towards older investors opting for the facility?

Raghav: Contrary to popular belief that it is senior citizen category that would opt for MAF, we have noticed that 40% of the total investors are below the age of 35. Through our focus group discussions we realised that investors these days want to start young, primarily through the SIP route to build a corpus. Many of these investors look to cover their aging parents, in-laws in such an account. As a result, we have seen people getting disciplined to address health as a potential concern area. The other observation is that investors above the age of 35 prefer lumpsum investment whereas the younger age group are investing via the SIP route.

WF: You have now extended the MAF facility across more products - what is the thinking behind this move and which products now offer MAF as an add-on?

Raghav: When we started in the month of March 2016 with only ICICI Prudential Savings Fund with MAF, the general feedback from investors and distributor community was that having just a single product offering MAF will restrict the scope of the feature. Therefore, inorder to broaden the scope of investment some of the equity schemes were added to this feature.

Taking into consideration these observations, we introduced the 'MAF - Power of Three' option, wherein the investors can take exposure to both debt and equity, through a combination of funds, thereby generating the alpha through the equity exposure and addressing the 'contingency planning' requirement at the same time.


WF: What is the MAF - Power of Three with one cheque facility and how does it work?

Raghav: MAF - Power of Three is an option wherein an investor can invest in a pre-determined bucket of Mutual Fund products - ICICI Prudential Savings Fund (50% of Total Investment Amount) + ICICI Prudential Value Discovery Fund (5% of Total Investment Amount) + ICICI Prudential Balanced Advantage Fund (45% of Total Investment Amount). Please note: Minimum investment amount under MAF - Power of Three option should be Rs. 20,000.

By subscribing to this option, 59%of the investment becomes free of exit load. This has been designed in such a manner so that in case of an emergency, the investor can redeem with less worry about the exit load applicable. Because of the 50% exposure to equities in the form of ICICI Prudential Value Discovery and ICICI Prudential Balanced Advantage Fund, there can be a scope to generate alpha from these investments. Historically, this option works to be better,a proposition which was liked by both the investor and the distributor alike.

This option is potentially ideal for wealth creation while simultaneously being prepared for medical contingencies.

WF: Can investors opt for adding MAF to an existing folio? Can they also look to extend MAF benefits to other family members? Is there a cost element involved?

Raghav: Based on popular feedback, we have now extended MAF enrolment through existing folios as well.

Today, we have upto three holders for a particular folio and all three are issued a MAF card, which is an E-card. Once the folio is opened, the primary holder can contact Vidal Health - the Service Provider, and request for addition of members - spouse, parents, parents-in-law and up to two dependent children. Once the required details are all in place with Vidal Health, each of the members added will be issued MAF E-card. Benefits of MAF can be availed for such added beneficiaries by the holders of the folio to manage their healthcare expenses.

MAF as a feature is available at no extra charges levied.


WF: What is the rationale behind extending MAF to non-individual investors?

Raghav: There has been considerable interest from the proprietors and HUF who wished to invest into funds through this mode. Also, there is case when an owner of a company with 40-50 employees can invest in a fund, and make provision for healthcare expenses of such employees. Such added employees will be provided with MAF E-cards. In order to facilitate such needs, it was essential to extend MAF to non-individual investors.


WF: Is MAF now digitally enabled for those who do not want to go through physical paperwork?

Raghav: For a new investor, MAF can be accessed from our website and app IPRUTOUCH. Additionally, a distributor too can initiate the transaction on behalf of the investor. .

WF: With some experience of MAF now under your belt and with the extension of MAF benefits the way you have now done, how do you see MAF developing as a proposition? Do you see this as the first of various add-ons that you might introduce (like we have riders in insurance) or is it likely to take a life of its own over time?

Raghav: Often Indian investors keep aside Rs 1-2 lakh in order to meet the unforeseen hospitalisation needs. However, such funds may not be channelized to mutual fund on concerns relating to access, redemption, turnaround time etc. But, through MAF, this contingency fund (for health issues) is available 24*7. Here there is no worry of underwriting, no restrictions with respect to previous health history or anything related to the same. MAF can cater to financial planning for healthcare expenses for the investors, and can also compliment other such avenues that may be available with the investors.



Product Feature link:

Discount on hospital bills and coverage of this facility are subject to terms and conditions. Please refer application form of this facility for the same. Terms and Conditions of the Medical Advantage Feature are mentioned in the application form

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The information contained in this communication is only for the reading/understanding of the registered Advisors/Distributors. All data/information used in the preparation of this communication is specific to a time and may or may not be relevant in future post issuance of this communication. ICICI Prudential Asset Management Company Limited (the AMC) takes no responsibility of updating any data/information in this communication from time to time. The AMC (including its affiliates), ICICI Prudential Mutual Fund (the Fund), ICICI Prudential Trust Limited (the Trust) and any of its officers, directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this communication in any manner.

Nothing contained in this communication shall be construed to be an investment advice or an assurance of the benefits of investing in the any of the Schemes of the Fund. Recipient alone shall be fully responsible for any decision taken on the basis of this document.

ICICI Prudential Savings Fund


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