Pine Bridge India – US Equity Standard Fund – Dollar SIP scheme
Pine Bridge India mutual fund (earlier called AIG MF) has launched a unique mutual fund scheme called, Pine Bridge India US Equity Standard Fund Dollar SIP scheme, which offers an investor to invest SIP in Dollars. What is this new mutual fund Scheme is all about? What are its pros and cons? Do you really benefit out of such Dollar SIP schemes?
About Pine Bridge India – US Equity Standard Fund – Dollar SIP scheme
Pine Bridge recently launched this mutual fund scheme indicating that you can invest in this scheme through SIP and the SIP amount would be indicated in US Dollars. The SIP amount indicated in US Dollars would be converted into Indian Rupees and debited every month to allocate mutual fund units.
How does this work?
Normally you would opt for MF Scheme and indicate the monthly SIP amount. In this mutual fund scheme instead of Indian rupee SIP amount, you would indicate US Dollars SIP amount. The mutual fund house would take RBI reference rate of conversion from US Dollars to Indian Rupee one week before the SIP date and debit such Dollar SIP amount convered into Indian Rupee, to your bank account. Based on the converted Indian Rupees, your mutual fund units would be allotted to your mutual fund account.
Also Read: Ways to open mutual fund account online
Let me explain this with an example.
You can opt for USD 100 as a SIP amount with a SIP date as 8th of the month. Now one week before the SIP date, i.e. 1st of the month, this mutual fund house would check RBI reference rate for conversion of US Dollars to Indian Rupee. Assume that the rate is Rs 60 per dollar. Means to buy mutual fund units for USD 100 SIP amount, it would debit your account for Rs 6,000 (Rs 60 x USD 100). Equivalent mutual fund units of Rs 6,000 would be credited to your mutual fund account. Such SIP of USD 100 per month would continue till the end of your SIP scheme's duration.
The concept is nothing but you are investing in an equivalent USD amount in INR. There is no other change. The SIP amount would be deducted in Indian Rupees only.
What the advantages of Pine Bridge India – US Equity Standard Fund – Dollar SIP scheme?
- This mutual fund scheme is International mutual fund and invests in US Equity. It could capture the potential opportunities in the US and can grow your money in the long run.
- You would get the feeling that you are investing in US Dollars.
- You might be thinking of having child education in foreign and need to meet financial goals. In such case, you might be interested to measure your SIP mutual funds in terms of dollars to achieve the target. E.g. If you think your child foreign education would cost you USD 5,000 in the US, you can consider taking USD 100 as SIP for 50 months (excluding returns benefit, which I am parking aside for a minute for easy understanding).
- This scheme could be used by those who want to spend vacation with their family in USA and want to save in US Dollars from now on.
Negative side of Pine Bridge India – US Equity Standard Fund – Dollar SIP scheme
- Investment is converted from US Dollars to Indian Rupees. Your mutual fund investments would be redeemed and sold in Indian rupees only. Hence, no Dollars are paid at the end of the scheme.
- Rupee depreciation and appreciation would not have any impact on your investments. In case you are planning for child education in foreign and saving equivalent USD in INR in this scheme, this can skew your investment plan. E.g. USD 100 @ Rs 60 = Rs 6,000 and when Rupee depreciates to Rs 66 (which happened last year), your equivalent US Dollars would be 90 and not 100 when you want to sell. Hence, you cannot completely rely on this Dollar SIP scheme.
- There are only a few mutual fund schemes in Pine Bridge mutual fund, which are providing good returns in this bull run. Hence we need to really understand how this new scheme can perform well in future.
- This is an international mutual fund, which is high risk, high return fund.
- Non Resident Indians (NRI’s) residing in United State of America and Canada cannot apply this scheme option. Other NRI’s can apply this feature on repatriation and non repatriation basis.
How to invest in Pine Bridge India – US Equity Standard Fund – Dollar SIP scheme?
Fill the application and enroll for Dollar SIP option in this mutual fund scheme and give an ECS mandate in USD terms. E.g. USD 100 as SIP amount. This Mutual fund would check relevant conversion rate one week before the SIP date and debit equivalent INR amount as SIP amount.
Also Read: Step-by-Step guide on investing in direct mutual funds
Is there any minimum and maximum SIP amount?
You need to invest a minimum of USD 100 per month and multiples of USD 1 thereof. There is no maximum SIP amount limit. This Dollar SIP scheme is not available for lump sum investment.
Where can you find more info on this Dollar SIP scheme?
You can visit Pinebridge.in for more info
Final Thoughts: There are a few advantages of this unique mutual fund scheme. If you wish to save some Dollars for your child for their foreign education, you can consider such schemes after considering the negative points indicated above. Alternatively, you can simply invest in best mutual funds in India for an equivalent amount with some addition of buffer to that. I feel a second option would work better rather than giving a try for such mutual fund schemes.
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Pine Bridge India – US Equity Standard Fund – Dollar SIP scheme
I want invest 10000 rs. per month for fifteen years in USA mutual fund . I am staying in India. I am an indian.
I am working in UAE and wishing to invest in mutual funds. I am new to this field and one of the insurance brokers company M/S Omega insurance brokers, Dubai have contacted me to invest in dollars and they have sent some details about the funds. Please find below the funds names
1. Investco global health care
2. Fidelity American
3.HSBC indian Equity
4. First state global list.
5. Fidelity pacific
6. Emirates MENA top companies
I am confused and please help me with your valuable comments.
Thanking you and looking forward for your earliest reply.
Hi Pramod, Looks these are foreign funds. I do not have idea. I only advice for India based investment options. Try investing in Indian mutual funds
First of all thank you for sharing such informative information about the investment.
Currently my age is 30. i am looking for the best place to do the investement in the following scenarios
1) Monthly Investment for 3-5 years
2) Long term investement (10-15 years)
3) Any good SIP plans
4) Better Health Insurance plan for (Myself+Spouse+1children)
Please help me to provide your valuable comments.
Thanks and Regards
Rajeev, For medium term of 3 to 5 years, look to invest in bank RD and Balanced mutual funds. For long term, start looking for various options like large cap funds, mid-cap funds, Infrastructure funds etc. You can look for HDFC Top-200 fund, Birla FL frontline, ICICI Focussed fund, HDFC mid-cap fund, FT India smaller companies fund etc. Regarding health insurance, you can check for Apollo munich health insurance and star health insurance. Refe rmy articles on this blog under “Insurance section”