Index Long Term Strategy is a powerful investment plan which has been developed by Finideas after significant planning and research. This strategy offers our investors an excellent way to build their wealth in the long term while limiting the risk to the maximum extent possible.

We keep receiving certain questions from many of our customers which we will try to answer in this article. Hopefully, this will help you to understand ILTS better and make an informed decision whether to choose it or not.

1. Can There Be Losses In ILTS?

Yes, there can be losses.

Please understand that ILTS is a market-linked product. So, there will be situations when the market will not move or even fall in some years. This can lead to a loss in that year.

The extent of the loss can be

• 3-4% in the Relax Plan,
• 8 – 9% loss in the Basic Plan and
• 10 to 11% in the Power Booster Plan.

Even if you consider the interest that you will earn on the remaining amount you should be prepared to bear a risk of 3 to 4% per year. You must enter the Index Long Term Strategy only if you are able to accept this loss potential.

From our experience, we can say that you will earn money if you hold onto the portfolio in the long run. This is because of the hedging strategies that we take. These strategies ensure that even if the market falls drastically the extent of your loss will be limited.

In other words, it can be said that TIME is going to make money for you if you patiently stay invested in ILTS.

2. What Should Be My Ideal Investment Horizon For ILTS?

We recently conducted a poll among our existing customers about how long they want to hold onto their portfolios after they invest in ILTS.

The results were as follows:

• Long term period more than 10 years – 52%
• Medium term period 3 to 10 years – 45%
• Short term period less than 3 years – 2%

We will recommend that you stay invested for at least 3 years in ILTS. This is because anything less than three years is short term and there is a high possibility that the markets may take a downward swing and not do well. However, in the long run, there is a higher chance that markets will do well and you will earn good returns from your portfolio.

If you have invested for less than three years or planning to do so, you must consult your relationship manager from Finideas to review your strategy.

3. Can You Explain The New Invoicing System Of ILTS?

We have recently changed our invoicing system to make it more investor-friendly. In our previous invoicing system, there were the following three problems that we have solved in the new system:

• The date of invoice for every client was different, which caused a lot of confusion for the investors as well as our team.
• A lot of time that we spent in explaining it to the investors
• We had to make regular efforts to collect the AMC

In the previous system, the entry date of the investor was taken as a start date and invoices were generated after every 6 months from the date on a rolling basis. This made it extremely difficult for the investors to remember when the next invoice is going to be raised.

In the new system, the invoicing dates are fixed. They will be raised twice in a year on 1st April and 1st October for all clients, irrespective of the date of investment in the ILTS scheme.

For example, if you enter into ILTS for the first time on the 15th of January, your first invoice will be for 15 January to 31st March. Thereafter, the next one will be raised on 1st of April and following one on 1st October and so on. This will make it very easy for you to remember the dates when you must pay your next AMC.

Benefits of the new system

• Tracking of the invoicing period has become easy
• It becomes very easy for the investor to claim the full invoice against the taxable income.
• Better accounting system

4. Can I Withdraw Funds From My Account Before Maturity?

We provide a Systematic Withdrawal Plan under ILTS which will enable you to take out funds from the account on regular basis.

Under this facility, if you have invested the full amount in ILTS, you can withdraw 0.50% per month, i.e., 6% per year from your account.

So, for example, if you have set up a portfolio of Rs.1 crore then every month you can withdraw Rs 50,000, i.e., 0.5 % of your portfolio.

Can I Get A Discount On The ILTS Fees?

You can get a discount of 5% on the AMC if you pay it through an e-mandate. This facility is not available in case of payment made through cheque, net banking etc.

We hope that these expressions have helped you to understand the features and processes of Index Long Term Strategy better. In the future also will give you further updates and explanations based on the questions that you ask us.

You can get in touch with your relationship manager from Finideas to discuss your specific requirements. We will be happy to help you out.

Happy Investing!

This article is for education purpose only. Kindly consult with your financial advisor before doing any kind of investment.