Samco Mutual Fund on Monday launched a systematic transfer plan (STP), called ‘Timer STP’, and a debt fund, named Overnight Fund, whose new fund offers (NFOs) will run from October 4 to 6.
The minimum amount to register TimerSTP or minimum amount required to start TimerSTP is Rs 25,000, paid weekly, monthly, and quarterly. Explaining the scheme, Umeshkumar Mehta, the CIO of Samco Asset Management, said the ‘Timer STP’ uses Samco’s proprietary ‘Equity Margin of Safety Index (EMOSI) Indicator’, and EMOSI’s value would be updated daily on the Samco website.
Mehta added that if the past market investment and returns data are compared, it is found that investors often earned less than the benchmark because investors typically flocked to the market during its highs and got out at a loss when the market was at a low.
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In situations like this, he said a Timer STP helps investors shun emotional bias and gather more units at a lower net asset value (NAV) and reap the benefits in bull market phase.
What Is A Timer STP?
Samco’s Timer STP aims to use the proprietary Equity Margin of Safety Index (EMOSI) data which is based on the principles of safety investing margin. It means that it will invest aggressively when the market is high and slow down when it is low.
Mehta said, “With Timer STP, we are enabling an average investor to avoid entering the markets at the wrong time and sail through the market cycles efficiently.”
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Samco said that its EMOSI index incorporates principles and concepts like price to equity, market cap to gross domestic product (GDP), interest rate spreads, bond yields, moving averages, market indicators, standard deviation, call ratios, volumes, etc.
On March 23, 2020, the market crashed after the government announced a nationwide Covid-19 lockdown. The Nifty 50 fell about 1135 points to around 7600 points in a single day. However, on January 31 2022, it was up about 230 points to close at around 17,300.
According to data from NSE, compiled by Refinitiv, and referenced by Samco Mutual Fund, the active, unique PAN cards rose from 48.15 lakh users in March 2020 to 117.66 lakh in January 2022 in the NSE cash segment. So, if the active permanent account number (PAN) data is referenced with the market movement, it shows investors entered the market when it was at a high and left when it was at a low.
Mehta said there have been more active, unique permanent account number (PAN) cards in the cash segment of the National Stock Exchange (NSE) in the last few years.
Samco further said in a press release that “An average investor inadvertently buys an equity scheme at the top of the cycle by following the herd mentality” and exits “when equities have already fallen substantially because of the fear of making higher losses.”
SAMCO Overnight Fund NFO
The SAMCO Overnight Fund will invest in short-term debt papers. The NFO will remain open from October 4 to October 6. The minimum investment amount is Rs 5000, with no exit load.
