How does it work

The Relax Plan offers a systematic withdrawal option for investors. They commit 100% of their investment to this plan, with 30% allocated to the Index long-term strategy and 70% to Debt Funds. The investor receives a monthly payout of 0.5% of the exposure value, which is fulfilled by redeeming a portion of the debt funds. This process is repeated to maintain a consistent monthly income while preserving the investment portfolio. The strategic allocation allows for long-term growth and regular income without liquidating the entire investment. Systematic withdrawal in the Relax Plan of the Index long-term strategy involves a meticulous allocation of funds and strategic redemptions to ensure a steady payout for the investor. Let's break down the process step by step. Relax Plan and 100% Investment The systematic withdrawal feature is exclusive to the Relax Plan, which mandates a 100% investment of the exposure value. Investors commit the entire sum to this plan to leverage the benefits of the systematic withdrawal option. Utilizing 30% in Index long-term strategy To gain exposure to the Index long-term strategy, 30% of the total investment is utilized. In the example provided, with an exposure value of Rs 1 crore, Rs 30 lakhs is used to take a 100% exposure in the Index. Parking 70% in Debt Funds The remaining 70% of the investment, in this case, Rs 70 lakhs, is strategically allocated to Debt Funds. This allocation aims to generate interest income from the debt instruments, providing a stable source of returns. Monthly Payout Calculation The investor then initiates a systematic withdrawal for regular monthly payouts. The payout amount is set at 0.5% of the exposure value. Using the example, with an exposure value of 1 crore, the monthly payout would amount to Rs 50,000. Redeeming Debt Funds for Payout To fulfill the monthly payout commitment, the investor redeems a portion of the debt funds. In this case, Rs 50,000 is redeemed every month. The redemption is carefully managed to maintain the balance between the need for regular income and the preservation of the investment portfolio. Ongoing Systematic Withdrawal The investor continues this process, redeeming a portion of the debt funds each month to meet the systematic withdrawal commitment. This ensures a consistent and predictable monthly income for the investor. Balancing Portfolio and Income Needs The strategic allocation to both the index long-term strategy and debt funds allows the investor to balance the potential for long-term growth with the need for regular income. By utilizing interest income from debt funds, the investor can sustain the systematic withdrawal without liquidating the entire investment. In conclusion, the systematic withdrawal process in the Relax Plan involves a thoughtful allocation of funds, leveraging the potential of the index long-term strategy for growth while securing a steady income through strategic redemptions from debt funds. This approach combines the advantages of both equity and debt instruments to meet the dual objectives of capital appreciation and regular income.