Motilal Oswal Target Investment Plan (TIP) – Should you opt?

Motilal Oswal Target Investment Plan (TIP) – Should you opt-minMotilal Oswal Target Investment Plan (TIP) – Should you opt?

Motilal Oswal Investment Services is offering one unique feature called Target Investment Plan (TIP). Motilal Oswal TIP works based on targeted financial goals and recommend top mutual fund schemes based on the financial goals. How does Motilal Oswal Target Investment Plan work exactly? What are the features of Motilal Oswal TIP where Mutual Fund Schemes are recommended? Should an investor consider such theme based Mutual Fund Schemes or just invest in Top Performing Mutual Fund Schemes? Who really need to opt such Target Investment Plans from Motilal Oswal?

Also Read: Best Mutual Funds to invest from Motilal Oswal

What is Motilal Oswal Target Investment Plan?

Though this feature is unique, several mutual fund advisors or investors do this with their excel knowledge. Motilal Oswal Target Investment Plan (TIP) is where one can input their financial goals along with tenure by which they want to achieve and mutual fund schemes recommendations and arrive the amount required for monthly SIP investment.

What are various financial goals you may have?

Motilal Oswal TIP is based on various financial goals, hence let’s quickly review what financial goals you may have:

1) Buying a Home

2) Buying a Car

3) Good Child Education

4) Child Marriage

5) World Tour / Vacation

6) Luxurious Retirement

7) So on…..

Investors keep running to chase above financial goals by investing in equity or mutual funds through SIP. Some of the aggressive investors feel real estate could be one option to achieve the above financial goals quickly.

How does Motilal Oswal Target Investment Plan (TIP) work exactly?

Here is how this theme based mutual fund recommendations work.

Step-1 – Select Financial Goal

Step-2 – Select Gender (Male/Female)

Step-3 – Enter your name and contact details

Step-4 – Select the number of years in which you want to achieve your goal (for retirement, it is automatically calculated based on date of birth)

Step-5 – Enter the current value of the goal (in case of retirement it would be monthly expenses).

Motilal Oswal Target Investment Plan (TIP) would throw some mutual fund recommendations based on the above details. You can click on “Invest” to proceed further.

1) Explained with an example – Financial Goal “Child Education”

Let me explain this with an example. Let us review one financial goal “Child education”. Here are the screenshots how it would look like

Step-1 –Financial Goal – Child Education Selected

Step-2 – Select Gender (Male/Female)

Child Education-Screen-1-min

Step-3 – Enter your name and contact details

Child Education-Screen-2-min

Step-4 – Assume that your child is in school for the past few years and you want to give foreign education in say next 12 years from now. I have selected 12 years.

Child Education-Screen-4-min

Step-5 – Assume you need Rs 25 Lakhs for foreign education.

Child Education-Screen-5-min

Step-6 – Now system says that the current value of Rs 25 Lakhs would be costing Rs 56.3 Lakhs after 12 years considering inflation. It also indicates that you need to invest Rs 14,000 per month to achieve the goal of Rs 56.3 Lakhs in 12 years.

Step-7 – Now system recommended 2 mutual funds for Rs 7,000 each totaling to Rs 14,000 monthly SIP to be invested. Means Motilal Oswal TIP says you need to invest in these 2 SIP’s for Rs 7,000 each to achieve your goal of child education in 12 years which would be of today’s value of Rs 25 Lakhs.

Child Education-Last Screen-min

Step-8- If you want to proceed and invest, click on invest and you would be taken further.

Also Read: Best Tax Saving Invesmtent Plans to invest in 2017-2018

2) Explained with another example – Financial Goal “Luxurious Retirement”

Let me explain this with another example taking Luxurious Retirement as goal.

Step-1 – Financial Goal – Luxurious Retirement selected

Step-2 – Select Gender (Male/Female)

Luxurious Retirement-Screen-1-min

Step-3 – Enter your name and contact details

Luxurious Retirement-Screen-2-min

Step-4 – Assume that you are 41 years of age and it would take another 19 years for retirement.

Luxurious Retirement-Screen-4-min

Step-5 – Assume that currently you have Rs 50,000 per month expenses which you want spend even after retirement.

Luxurious Retiremnet-Screen-5-min

Step-6 – Now system indicates that the current expenses of Rs 50,000 per month would be Rs 1.8 Lakhs per month after 19 years. It also indicates that you need to accumulate retirement corpus of Rs 4.3 Crores in next 19 years and need to invest Rs 33,000 per month from now on to achieve this corpus.

Step-7 – Now system recommended 3 SIP mutual funds. Means Motilal Oswal TIP says you need to invest in these 3 SIP’s for Rs 33,000 each to achieve your retirement goal in 19 years to accumulate Retirement corpus of Rs 4.3 Crores and to continue your same level of expense of Rs 50,000 per month today after 19 years.

Luxurious Retiremnet-Last screen-min

Step-8- If you want to proceed and invest, click on invest and you would be taken further for investments.

Should you opt for Motilal Oswal Target Investment Plan (TIP)?

Let me first summarize what Motilal Oswal TIP is doing. It takes your financial goal, asks basic questions like contact details, tenure etc., computes future value and recommending some mutual fund to invest. While it is suggesting mutual fund schemes, more than 50% of MF schemes are from its own AMC (e.g. Motilal Oswal Most Focused 25 Fund or Motilal Oswal Most focused midcap 30 fund). Also I noticed that it suggests only from few selected funds (e.g. Axis Equity Fund or Mirae Asset India Opps Fund, apart from its own AMC funds). The scope of mutual fund schemes selection is limited with this approach. If you select just 2-3 funds, there is no guarantee that such mutual fund schemes would perform in long run of 10-20 years.

One can still consider taking Motilal Oswal Target Investment Plan approach, but invest in a 5-7 top mutual fund schemes portfolio consists of diversified, large cap, midcap or balanced mutual funds outside of Motilal Oswal. Even if 70% to 80% of funds are performing well and others are average, you would be easily achieving the goals.

Readers, what’s your view on Motilal Target Investment Plan theme based mutual fund schemes?

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Motilal Oswal Target Investment Plan (TIP) – Should you opt?

Suresh KP
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  • aishwarya jain

    Hi Suresh,

    How do I get in touch with you. 

  • Sundari

    Very good analysis. We expect better schemes from Motilal Oswal.

  • Suresh Gopalakrishnan

    Dear Mr.Suresh,
    At present I monthly investment of 40,000 for last two and half years
    1) Please provide good return mutual funds.I will be stopping mutual funds 2 years from Now as I will be without job and no pension.
    2)Is it good idea if I invest entire salary of Rs.82,000 to Mutual fund and get a systematic withdrawal of units purchased earlier. ( Rs.40,000 PM).My idea to make my fund for expenses work for two years before It fall to systematic withdrawal.

  • Vandhi

    What is the expected return and inflation is considered for Motilal TIP software to arrive Retirement and Education SIP in this example.

    Another point is missing :  No debt funds are considered for goal , No asset allocation.

  • Priya Gopal Krishna

    Rightly the aim is seen to promote their inhouse funds with a mix of limited external options. Which anyways investors have choice to do with simple math calculations. 


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