Should you use balanced advantage funds for generating retirement income?

What are retirement portfolios made of? At a minimum, a retirement portfolio should contain a debt component for stability and to draw periodic income from, an equity component to allow the portfolio to grow and keep up with inflation, and importantly a rebalancing plan to optimise growth and stability. (we are not talking about physical assets here).

If this is the need, what if we use a balanced advantage fund, which invests in both debt and equity, and the fund manager takes care of asset allocation as well? Does that reduce your job to just coming up with a withdrawal plan? And are there any hidden risks in going with this seemingly ready-made solution?
In this article,let’s look into how a full-fledged retirement income generation plan from a balanced advantage fund stands against one from a managed equity and debt portfolio.

Portfolio 1: Balanced advantage fund

Balanced advantage funds, as an official mutual fund category, came into existence after SEBI’s classification of mutual funds in 2018. A typical balanced advantage fund has an effective equity exposure anywhere between 30% to 80% based on the fund manager’s perception of whether equity is overvalued or undervalued. It is important to note that each fund house will have different metrics to assess this.

Now, this category is officially in place only for the past 6 years. But we need longer data to assess the feasibility of balanced advantage funds as a retirement product. Therefore, we picked a fund that chose to be a balanced advantage fund even before SEBI’s category came into being, making it a pioneer in this category. We are talking of ICICI Pru Balanced Advantage (which was first launched as ICICI Pru Equity and Derivatives Fund) For the period we have chosen, from January 5, 2007, to July 5, 2024, the fund has given a CAGR of 11.49%.

Portfolio 2: Separate equity and debt funds

For this portfolio, we have selected funds with similarly long track records from the same fund house. The equity fund chosen is the ICICI Prudential Value Discovery Fund, and the debt fund is the ICICI Prudential Short Term Fund. We have used different asset allocations, which will be explained in the Analysis section below.

For the period from January 5, 2007, to July 5, 2024, the ICICI Prudential Value Discovery Fund delivered a CAGR of 17.04%. The ICICI Prudential Short Term Fund has achieved a CAGR of 8.19% for the same period.

Rebalancing plan

In an asset-allocated portfolio, rebalancing is done to take profit from inflated assets or to add to an asset that is available cheaply. This can be done on a rule-based approach, such as once a year, if the asset allocation has moved in either direction by a certain threshold, bringing it back to the original allocation. For example, in a 60-40 Equity-Debt portfolio, if equity goes up to 65% or above, you would sell part of the equity and buy debt to bring the total allocation back to 60-40. Similarly, if equity drops to 55% or below, you would sell part of the debt and buy equity.


However, since our two-fund retirement portfolio is quite minimalistic, we cannot allow selling debt to buy equity, as the debt fund is what we are counting on to meet future monthly withdrawals. (In an advanced retirement portfolio, there can be separate components to take care of periodic withdrawals and debt as part of the long-term portfolio to carry out rebalancing.) Hence, in our two-fund portfolio, rebalancing is done only if equity gets inflated. Redemption of equity is done when the equity asset allocation goes up by more than 5% from the original allocation, and this will be invested into debt.

Analysis

For our analysis, we started with an initial capital of Rs. 1 crore and tested initial annual withdrawal rates of 4%, 5%, and 6%. In each case, we applied an annual increment of 6% to the withdrawal amount to adjust for inflation, as typically done in retirement portfolios.
For example, with an initial annual withdrawal of 4% per year, the monthly withdrawal would be Rs. 33,333 (4% of Rs. 1 crore / 12).


In the second year, the monthly withdrawal would be Rs. 35,333 (106% of Rs. 33,333).
In the third year, it would be Rs. 37,453 (106% of Rs. 35,333). And so on.
The monthly withdrawal at the end of the period would be Rs. 89,759.
Please note that taxes have not been accounted for in this analysis.

Portfolio transactions

For Portfolio 1, the initial capital of Rs. 1 crore was invested in the ICICI Prudential Balanced Advantage Fund on January 5, 2007. Withdrawals began from the same fund starting from January 5, 2007, lasting till July 5, 2024.


For Portfolio 2, we considered two different asset allocations: a 50:50 equity:debt and a 30:70 equity:debt ratio. The initial capital of Rs. 1 crore was allocated to the ICICI Prudential Value Discovery Fund and ICICI Prudential Short Term Fund according to the chosen asset allocation. Monthly withdrawals were initiated from the ICICI Prudential Short Term Fund starting from January 5, 2007, to July 5, 2024.


Every January 5th, the portfolio’s asset allocation was reviewed. If the equity portion had increased by 5 percentage points or more from the initial allocation, it was rebalanced by redeeming from equity and reinvesting into debt to maintain the original allocation.

Here is how the results stands:

Metrics for evaluation

  • Balance Capital: The remaining amount in the portfolio after all withdrawals have been made.
  • Balance Capital Growth Rate: The annual growth rate of balance capital, after all the withdrawals in this period.If this rate keeps up with inflation (assumed at 6% in this analysis), the portfolio is likely to sustain future income generation. For example, in the case of Portfolio 1 (Balanced advantage fund) at an initial annual withdrawal rate of 6%, we started with Rs.1 crore and ended with Rs.1.57 crore. For a period of 17.5 years, that is a growth of 2.63% per annum.
  • Final Withdrawal: The annual withdrawal rate in the last month under observation based on the balance capital. For example, in the case of Portfolio 1 (Balanced advantage fund) at an initial annual withdrawal rate of 6%, the final redemption is Rs.1.35 lakh, the remaining capital is Rs.1.57 crore. This is 0.855% per month or 10.26% per year.
  • Withdrawal Risk: The percentage of observations throughout the income generation period (17.5 years in this analysis) where the annual withdrawal rate exceeded the initial withdrawal rate. For example, in the case of Portfolio 1 (Balanced advantage fund) at an initial annual withdrawal rate of 6%, out of the 211 months when a withdrawal was done, only 11 times the withdrawal was below 6% (annual rate) of the remaining capital. At 200 months, the withdrawal amount was above 6% (annual rate) of the remaining capital, resulting in a withdrawal risk of 94.8% (200/211).

Among the metrics, one needs to make the distinction between final withdrawal rate and withdrawal risk. Withdrawal risk points to the stress the portfolio underwent in generating retirement income during the period under observation. The lower the value, the less the risk. Final withdrawal rate points to future risk. A higher final withdrawal rate compared to the initial withdrawal rate indicates capital erosion in the portfolio, risking future income generation.

Findings

All three portfolios comfortably sustained the 4% initial withdrawal rate, as evidenced by the growth in remaining capital above the 6% annual increment in withdrawals. The final withdrawal rates were lower than the initial rate set for all portfolios. However, when examining withdrawal risk, the Balanced Advantage fund portfolio exhibited a higher risk (41.7%) compared to the asset-allocated portfolios.

In this case, the Balanced Advantage fund portfolio appears stretched in its ability to provide retirement income. The remaining capital grew below the rate of increase in withdrawals, and the final withdrawal rate exceeds the initial 5% withdrawal rate. The withdrawal risk is very high at 94.3%, indicating high stress in the portfolio to generate income in the period.

In the asset-allocated portfolios, the 30:70 Equity:Debt portfolio managed to maintain its sustainability for retirement income withdrawals. Its capital grew at nearly 6%, and the final withdrawal rate was slightly below the initial rate. However, with a withdrawal risk of 56.87%, there was notable stress in meeting income needs during the period.

Meanwhile, the 50:50 Equity:Debt portfolio has comfortably managed to withstand the withdrawals.

In this case, both the Balanced Advantage fund portfolio and the 30:70 Equity:Debt portfolio faced stress due to higher withdrawals. However, the Balanced Advantage Fund portfolio experienced more stress than the 30:70 Equity:Debt portfolio, as evidenced by a final withdrawal rate 2.5% higher than the latter. Additionally, the withdrawal risk of the Balanced Advantage fund portfolio was over 10 percentage points higher than that of the 30:70 Equity:Debt portfolio.

Meanwhile, the 50:50 Equity:Debt portfolio managed to withstand the higher withdrawals in this scenario as well, although its performance was not as strong as in the 5% withdrawal case.

It is interesting to note that the asset allocated portfolios fared better than the Balanced Advantage fund portfolio, even the one with just 30% Equity allocation. If we look at the weighted average return of a 30:70 ICICI Prudential Value Discovery Fund:ICICI Prudential Short term fund for the period of analysis, we get 10.85%, which is less than the 11.49% the ICICI Prudential Balanced Advantage Fund has generated. To see what worked in favour of the asset allocated portfolios, we looked further at the portfolio rebalancing for various withdrawal cases. The below are the years in which the portfolio was rebalanced, or redemption from Equity was carried out to add to Debt.

In general, in the two equity and debt portfolios we have given, withdrawals are from debt. But since they undergo rebalancing, given below are years when Equity was redeemed as part of rebalancing in the asset allocated portfolio.

There are some interesting observations here. 

  • Even an asset allocated equity debt plan can cause stress to the portfolio by way of high withdrawals. Take the case of 6% withdrawal for the 30:70 equity:debt portfolio -  it saw a final withdrawal of 7.7% and in 83% of the instances the withdrawal was higher than the initial rate of 6%. Not a good thing. But here is the big positive. A rule based asset allocation strategy prevented redemption of equity at crucial points like beginning of 2009, during the global financial crisis, beginning of 2012, Eurozone crisis, beginning of 2017, post demonetisation, when equity markets were under stress. All these points were followed by a market rally, although to be known only in hindsight.The fact that withdrawals were from debt prevented unnecessary tampering of equity, allowing it to once again settle and grow. In any managed portfolio, periods when equity is available cheap is when we should avoid redeeming from equity and if possible, add to equity. 
  • In a balanced advantage portfolio too, it is likely that a fund manager will increase equity at this point and rightfully so (though we don’t have portfolio data for the older periods). However, if an investor has mandated a withdrawal from this fund, more equity will inadvertently be redeemed at this point, not allowing the same to be added/deployed (in equity). This has likely caused the balanced advantage fund portfolio to underperform 30:70 Equity:Debt asset allocated portfolio, despite having higher equity allocation, generating high internal returns, and having a fund manager oversight to assign equity and debt. 

Simply put, not withdrawing from equity, when the market is low has allowed the equity:debt portfolios to outperform the balanced advantage fund. That leaves these portfolios with higher corpus for future income generation. 

Conclusion

Here are the takeaways from this analysis:

  • In a robust retirement plan, it is essential to implement checks and balances to avoid redeeming equity during unfavourable market conditions. Opting for a balanced advantage fund portfolio forfeits this flexibility available to portfolios with separate equity and debt components.
  •  Our analysis reveals that a rule-based withdrawal and reallocation strategy can potentially extend the lifespan of your retirement portfolio with lower risk compared to a simplistic portfolio solely reliant on balanced advantage funds.

When it comes to critical goals like retirement planning, it's crucial to develop a comprehensive plan that considers personal circumstances and market uncertainties. Consider seeking assistance from financial planners, where necessary, to ensure your plan is well-suited to meet your long-term financial objectives.

We have also separately written about the shortcomings of using balanced advantage funds for SWP (Systematic Withdrawal Plans) in an earlier article, Should you use balanced advantage funds for SWPs? - PrimeInvestor.

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38 thoughts on “Should you use balanced advantage funds for generating retirement income?”

  1. Thanks for article. i did this calculation for 6% withdrawal case for 17,5 years exactly in the manner described for icici BAF which had CAGR of 11.58% in the time period taken. Still after all withdrawals as mentioned at the end one was left with significantly higher amount close to 2.18cr instead of 1.57cr as mentioned in the article table. This is a significant difference !
    Also for the 50:50 allocation rebalance case DIY portfolio in 6% withdrawal case the end corpus was only around 3cr instead of 3.31cr stated. (the internal return XIRR in this case is 12.7% which is made up of 50% eq 17.04% and a 50% debt of 8.1x% resp for time period.

    1. Bipin Ramachandran

      Hello,

      Looks like you applied constant returns throughout the period; when you do like that, it takes away the volatility, which is the real risk when we have to make constant withdrawals.

      For example, when we assume constant returns, the ICICI Bal advantage fund’s NAV will be approximately up 27% between 5-Jan-2007 and 5-Mar-2009, in reality, it was 24.7% down during the period. You can imagine what is the impact of this when we apply fixed rupee value redemptions on that NAV.

      The core point of this article was that in real life, if we set a blind withdrawal strategy, it may force you to sell equity at unfavourable points. When we do an analysis without accounting for volatility, there are no unfavourable points as the investment grows at a steady rate. This is one reason why analysis where consistent withdrawal is involved, it is better to be done with actual historical data or with some other methods that accounts for volatility.

      You can download the spreadsheet given in the article and go through the sheet ‘Calculation’ for more details.

      Thanks

      1. Thanks much again for immediate reply 😉 Got it.
        i somehow missed the XLS download link in the article with real NAV values to check it out.
        Yes, investor behaviour plays important role in MF redemptions.
        thx again

      2. Bipin ji,
        1 last Query here (thx in adv) :
        1) BAFs use a hybrid Nifty 50:50 composite index or Crisil 50:50 hyb as benchmark . Where do one get the past historical data for these benchmarks say in last 10/15 or 17.5 yrs as in this case?
        Just want to know how the 50:50 hyb passive/benchmark index perform in terms of returns, volatility and whether they atleast beat the benchmark in terms of returns

        1. Bipin Ramachandran

          Hello,

          Historical data of indices should be available from financial data providers like Crisil itself, or Icra, however, this may not be a free service. Alternatively, if you are looking for a benchmark to do your own analysis, you can look at NSE historical data. Which is available in the public domain. You can use the indices available or use multiple indices to blend and make a custom index that reflects a preferred asset allocation.

          Thanks

  2. 1. Any specific reason the value fund was considered and not a large or large and mid cap fund?

    2. I am wondering why is it that equity was redeemed more often in the 50:50 portfolio than in a 30:70 portfolio. I get that these are two separate portfolios, but it’s the same equity fund.
    If the equity valuation was rising and the threshold of 50% was hit, should it not have hit the 30%?
    Is this because of the base effect of having a higher equity proportion to begin with, or something else?

    In other words, is it because it’s easier to move up 5 percentage points when you start with 50 than with 30?

    1. Bipin Ramachandran

      Hello,

      1. No, there is no specific reason. Any fund with NAV history over the period of analysis can be used. NAV history can be replaced in the sheet ‘Calculation’, column B, C, and D and the sheet will calculate results using the news funds history.

      2. Your thought is correct. In an example case of 0% increase in debt, a 22.22% rise in equity is required to make 5% excess in a 50% equity portfolio, however for a 30% equity portfolio to become 35% equity with 0% increase in debt, a 25.64% rise in equity is required.

  3. contact.thiyagu

    Bipin and team,
    Thanks for this wonderful analysis. As you rightly said personal factors and taxation does play a huge part, but the core insight that not redeeming the equity units under stress does play a significant role in the sustenance of one’s retirement portfolio is indeed fantastic.
    I was dabbling with the idea of why not a conservative hybrid fund for regular withdrawals (like PP DAA, which additionally has favorable tax treatment). But as you said having separate debt and equity portions does makes great sense. It’s safe to see these hybrid funds (even though conservative) as part of one’s equity portfolio – used for hedging.
    With separate equity and debt allocations, during the yearly rebalancing time, one can draw the expenses for upcoming year from equity part if it needs pruning, else one can draw it from the debt portion. Of course there are many variants like having multiple funds in equity part (say passive funds forming core part, hybrid funds for hedging) and debt part (say arbitrage funds for better taxation) etc based on one’s preferences and needs.
    Thanks again for this nice analysis.

    1. Bipin Ramachandran

      Thank you! Glad that you find it useful!

      Regarding the use of hybrid funds for regular withdrawals, as we’ve seen in this analysis, it is not that it won’t work, but there may be alternatives with different risks and benefits. Of course, one needs to take into account the taxation and the effort they are willing to put in.

      As for using inflated equity at rebalancing time for that year’s income, yes, this should also work. Essentially, a dynamic plan that monitors the circumstances on an ongoing basis and makes corrections as needed will likely be better than a totally hands-free approach of putting everything into a hybrid fund and starting withdrawals.

  4. This is truly mind blowing article. Thank you very much for such a detailed master piece!! It would be great if a few of alternatives could be reviewed:

    Can following products get considered as part of SWP or profit booking from Equity to debt as part of re balancing:
    1. Conservative Hybrid Funds (Tax slab LTCG with 15% net equity but a non issue during retirement)
    2. Equity Savings Fund (Favourable LTCG Equity taxation with 30% net equity)
    3. Special cases like Parag DAA (Real Estate like LTCG (with new rules) with a potential 15 to 30% net equity)
    4. Liquid Fund with 3 year expense (Close to retirement)

    Debt is capital preservation but gives poor returns especially if someone is building the debt portfolio for about 10 years. Moving funds to CHF or ES or PPFA DAA like funds during re balancing might make it less riskier during retirement at the same time earning more returns during the process (pre ad post retirement). Also a Liquid Fund with 3 years expense and gets topped up every year to avoid sequence of returns risk from those with Equity exposure.

    Your views on this please.

    1. Bipin Ramachandran

      Thanks!

      Debt is indeed not the ideal option for the long term. However, it is advised to have some debt allocation in any long-term portfolio to keep overall portfolio volatility at a level the investor is comfortable with, maintaining portfolio hygiene by periodically rebalancing, and the debt allocation can be handy in case of any uncertainties during the accumulation phase.

      Regarding moving part of equity to low equity hybrid funds (balanced advantage, equity savings, or conservative hybrid) as a form of profit booking: this is likely to yield better outcomes in a prolonged bull market like the current one, where investors might otherwise book profits too early. However, a detailed analysis is needed to determine if there are advantages in profit booking to low equity hybrid funds instead of debt funds, while maintaining the intended asset allocation.

      For example, let’s say an investor is concerned about a huge rally in equity and decides to move Rs. 30 out of the Rs. 100 in equity to a debt fund (case 1).

      If they instead move the Rs. 30 to an equity savings fund (case 2), in many such instances, case 2 is likely to outperform case 1.

      However, in case 1, we end up with an asset allocation of 70:30 Equity:Debt. If we assume an equity savings fund has a 25% equity allocation, we have a 77.5:22.5 Equity:Debt allocation in case 2.

      Now, if we introduce another case of moving only Rs. 22.5 to a debt fund and keeping Rs. 77.5 in the equity fund as part of profit booking (case 3), it has the same asset allocation as case 2.

      Will case 2 be better than case 3? That will need a detailed analysis.

      Regarding keeping three years of expenses in liquid funds: this is a good strategy to reduce risk in retirement portfolios. In rare periods when both equity and debt markets are correcting together (e.g., August 2013 during the taper tantrum), the investor can use the buffer from liquid funds and allow the long-term equity and debt parts of the portfolio to recover.

      1. Thanks very much for your detailed explanation. I have built my entire core portfolio around Hybrid funds (Aggressive hybrid, BAF and MAF) and this is largely the decision I made after listening to ICICI Pru Shankar Naren that new investors have to be defensive and an easy way to practice asset allocation is choosing hybrid categories that buy ignored assets (debt) at stock market peaks in an unbiased manner and do the opposite at markets crash (like Covid). Unfortunately though some marketed Hybrid products as retirement solutions and a better FD product. Hope articles like yours can bust that myth.

        I also realised that products like Equity savings while very good at controlling volatility during known events (recent election result day) do poorly during unknown events like Covid Crash. I compared ICICI Pru Equity savings which did a great job during recent election day volatility but did poorly in Covid crash. For retired I think only way to protect is to ladder by constantly moving from high equity to no Equity allocation via Equity funds & high equity Hybrids to Low Equity exposure hybrids, Debt funds (like dynamic bond funds) and Liquid funds. This way you allow your money to benefit from growth in Equity, reduce your draw downs and have enough cash to live through a market crash.

        Your article helped me to solve that one puzzle I had always with Hybrids. I too got carried away that they allow for Smart withdrawal plans but realised now they they won’t work for all seasons. It would be the worst withdrawal plan in a market crash.

        1. Bipin Ramachandran

          It is indeed true that hybrid funds are a good option for beginners, especially in volatile markets. Even for experienced investors, if a hybrid fund’s risk-return profile fits within an investor’s portfolio, they can add the fund. The risk arises when these funds are used as FD alternatives or for periodic income withdrawal, where investors might be taking on more risk than they estimate.

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The RA shall adhere to the applicable regulations/ circulars/directions specified by SEBI from time to time in relation to disclosure and mitigation of any actual or potential conflict of interest. Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

General disclosures: PrimeInvestor Financial Research Pvt Ltd (with brand name PrimeInvestor) is an independent research entity offering research services on personal finance products to customers. We are a SEBI registered Research Analyst (Registration: INH200008653). PrimeInvestor Financial Research Pvt. Ltd., its employees, directors or agents, do not have any material adverse disciplinary history as on the date of publication of this report.

Restrictions on trading: To ensure no conflict of interest, the RA declares as follows:

  1. Personal trading activities of the individuals employed as research analysts shall be monitored, recorded and subject to a formal approval by the directors or compliance officer of PrimeInvestor Financial Research Private Limited.
  2. Research analysts employed by PrimeInvestor Financial Research Private Limited or their associates or relatives shall not:
    • Deal/ trade in stocks recommended/ tracked by the research analyst within 30 days before and five days after the publication of a research report;
    • Deal/ trade in securities that the research analyst reviews in a manner contrary to the given recommendation;
    • Purchase or receive securities of the issuer before the issuer's initial public offering, if the issuer is principally engaged in the same types of business as companies that the research analyst follows or recommends.

Disclosures with respect to Research and Recommendations Services:

  1. The RA or its directors or any of its officer/employee does not trade in securities which are subject matter of recommendation.
  2. The RA, or any of its officers, directors, employees, or subsidiaries have not received any compensation/ benefits whether monetary or in kind, from the AMC, company, government, bank or any other product manufacturer or third party, whose products are the subject of its Research Services or investment information.
  3. The Research Analysts who have prepared the research reports that form part of the Research Services (“Research Analyst”) certify that all of the views expressed in the research report accurately reflect their views about the subject company or subject security.
  4. The RA or directors or employees or Research Analyst certify that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.
  5. The Research Analyst has not served as director, officer or employee in the subject company, AMC or insurance company of the mutual fund or insurance policy that is the subject of this report, or company whose bonds, NCDs, fixed deposits or other savings products that is the subject of this report.
  6. The Research Analyst or their relatives do not have any known direct or indirect material conflict of interest including long/short positions in the subject company.
  7. The Research Analyst may hold investments in the stocks, mutual fund schemes, bonds, fixed deposits, insurance policies, or other products that are the subject of the recommendations provided as part of the Research Services. The Research Analyst certifies that they will not act in a manner contrary to their views on these securities except in the event of significant news or event or change in personal financial circumstances and without formal approval from the directors of PrimeInvestor Financial Research Pvt. Ltd. or the compliance officer.
  8. There are no actual or potential conflicts of interest arising from any connection to or association with any issuer of products/ securities, including any material information or facts that might compromise its objectivity or independence in the carrying on of the Research Services. Such conflict of interest shall be disclosed to the client as and when they arise.
  9. The RA or its directors or its employee or its associates have not managed or co-managed the public offering of any company. The RA or its directors or its employee or its associates have not received any compensation for investment banking or merchant banking of brokerage services from the subject company. The RA or its directors or its employee or its associates have not received any compensation for products or services other than above from the subject company. The RA or its directors or its employee or its associates have not received any compensation or other benefits from the Subject Company or 3rd party in connection with the research report/ recommendation.
  10. The subject company of its research recommendations was not a client of the RA or its directors or its employee or its associates during twelve months preceding the date of recommendation services provided.
  11. The RA or its directors or its employee or its associates has not served as an officer, director or employee of the subject company. Research Analysts has not been engaged in market making activity of the subject company.

PrimeInvestor Financial Research Pvt. Ltd., its Associates, the Research Analysts or their relatives holds ownership of 1% or more, in respect of the said issuer company(ies)? – NO

8. Termination of service and refund of fees:

The RA may terminate or suspend rendering of Research Services to the client in the following circumstances:

  1. On account of suspension/cancellation of registration of RA by SEBI. In case of suspension of certificate of registration of the RA for more than 60 (sixty) days or cancellation of the RA registration, RA shall refund the fees, on a pro rata basis for the period from the effective date of cancellation/ suspension to end of the client’s subscription period.
  2. The RA voluntarily chooses to terminate its Research Service. In the event of such termination of the Research Service, the RA shall refund the fees, on a pro rata basis for the period from the date of such termination of research service to end of the client’s subscription period.

9. Grievance redressal and dispute resolution:

Any grievance related to:

  1. nonreceipt of research report, or
  2. missing pages or inability to download the entire report, or
  3. any other deficiency in the research services provided by RA

shall be escalated promptly by the client to the person/employee designated by RA, in this behalf as under:

Name: Bhavana Acharya
Designation: Director & Compliance Officer, PrimeInvestor Financial Research Pvt Ltd
Email: [email protected]

The RA shall be responsible to resolve grievances within 7 (seven) business working days or such timelines as may be specified by SEBI under the RA Regulations.

RA shall redress grievances of the client in a timely and transparent manner. Any dispute between the RA and his client may be resolved through arbitration or through any other modes or mechanism as specified by SEBI from time to time.

If the client is not satisfied with the response of the RA, he/she can lodge his/her grievances with SEBI at scores.sebi.gov.in. Alternatively, the client may also write to any of the offices of SEBI. For any queries, feedback or assistance, please contact SEBI Office on Toll Free Helpline at 1800 22 7575 / 1800 266 7575

Details on grievances are available on the Website as follows: https://primeinvestor.in/ra-grievance/

10. Additional clauses:

Scope of the Research Service: The Research Services will be limited to providing independent research recommendation and shall not be involved in any advisory or portfolio allocation services. The Research Services are not meant to be tailor-made or customized solutions that specifically apply to each client based on his/her risk profile.

The RA never guarantees the returns on the recommendation provided. Investor shall take note that investment/trading in stocks/Index or other securities is always subject to market risk. Past performance is never a guarantee of same future results. The RA shall not be responsible for any loss to the Investors.

This service is not directed for access or use by anyone in a country, especially the USA, Canada or the European Union countries, where such use or access is unlawful or which may subject PrimeInvestor Financial Research Pvt Ltd or its affiliates to any registration or licensing requirement.

The Research Service, including recommendations, research reports, updates, and other information will be accessible through the RA’s website https://primeinvestor.in only. Such recommendations and updates will not be provided over phone calls.

Fees: Our current fee structure, the term and duration of our subscription for our Research Service, can be viewed on our website: https://primeinvestor.in/prime-pricing. Eligibility for any discounts is ascertained at the time the client subscribes. Any such discount and its tenure shall be at the discretion of the RA.

Subscription and access to content services fall under the purview of Goods and Services Tax (GST) as per the current indirect taxation policy, Government of India. Unless otherwise indicated, prices stated on our website are exclusive of applicable GST, any applicable value added tax (VAT) or other sales taxes. We are a business-to-consumer (B2C) service provider and we do not commit to provide any input tax credit on GST charged on subscription to our Research Service.

We may change the Subscription Fees and charges then in effect, or add new fees or charges which will take effect at the end of the client’s subscription period, by giving notice in advance and an opportunity to cancel renewal of the subscription.

Subscription Access & Renewal: Subscription to the Website commences immediately on the realisation of payment of the Subscription Fees. Subscriptions are set to be renewed automatically at the end of the subscription period.

Unless the client notifies us before the end of his/her subscription period, or the client cancels the auto-renewal mandate within the period specified by law, that the client does not wish to renew his/her subscription, the client’s subscription will renew for the period defined by the client’s subscription plan. We will charge the subscription using the same payment method that you previously used.

Although the client may notify to us his/her intention to his/her subscription, such notice will only take effect at the end of his/her then current subscription period, and he/she will not receive a refund other than as set out under Clause 8 in these Terms.

The client may notify us of his/her wish to cancel his/her subscription by sending an email to [email protected]. The client must provide at least 5 business days advance notice for this to be implemented.

Refunds: There can be no cancellation and refund of subscription fee paid once the subscription is active, other than as stated in Clause 8 of these Terms. If the client is entitled to a refund as specified under Clause 8 of these Terms, the RA will credit that refund to the card or other payment method used by the client to submit payment, unless it has expired - in which case the RA will contact the client to proceed with the refund. If we do issue a refund or credit due to circumstances outside the obligations specified under Clause 8, we are under no obligation to issue the same or a similar refund in the future.

General disclaimers: The recommendations made herein in the Research Services are expression of views and/or opinions and should not be deemed or construed to be advice for the purpose of purchase or sale of any security, nor a solicitation or offering on any investment/ trading opportunity on behalf of the company, AMC, insurance company, or issuer of security referred to herein.

The content and research reports generated by the RA does not constitute or is not intended to constitute an offer to buy or sell, or a solicitation to an offer to buy or sell financial products, units or securities.

The information/ opinion/ views mentioned in research reports or by the RA are not meant to serve as a professional guide to the client or recipients of this Report. The research report, recommendation, or any other content published by the RA do not assure or guarantee any minimum or fixed returns to the client or recipients of the reports/ recommendations/ content.

Use of this information is at the client’s own risk. The client must make his/ her own investment decisions based on his/her specific investment objective and financial position and using such independent advisors as he/she believes necessary. The services rendered by the RA are on a best-effort basis. All information in the content or research report of the RA is provided on an as is basis. Information is believed to be reliable but the RA does not warrant its completeness or accuracy and expressly disclaim all warranties and conditions of any kind, whether express or implied.

While due care has been taken to ensure that the disclosures, information, and opinions given are fair and reasonable, PrimeInvestor Financial Research Pvt Ltd and/or none of its officers, directors, partners, employees, agents, subsidiaries, affiliates or business associates shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way whatsoever from the information/ opinions/ views contained in the research report and recommendations that form part of the Research Service, and/or mails, social media or notifications issued by PrimeInvestor Financial Research Pvt Ltd or any other agency appointed/authorised by PrimeInvestor Financial Research Pvt Ltd. Returns and performance figures mentioned in the research report represent past performance and should not be constituted to be future returns or guaranteed returns.

Any agreements, transactions or other arrangements made between the client and any third party named on (or linked to from) the Website are at your own responsibility and entered into at your own risk. Any information that you receive via the Website, whether or not it is classified as “real time”, may have stopped being current by the time it reaches you. Market price information may be rounded up/down and therefore may not be entirely accurate.

The purpose of these disclosures is to provide essential information about the Research Services in a manner to assist and enable the prospective client/client in making an informed decision for engaging in Research Services before onboarding.

History, present business and background: PrimeInvestor Financial Research Private Limited is registered with SEBI as Research Analyst with registration no. INH200008653. The Research Analyst got its registration on August 19, 2021 and is engaged in offering research and recommendation services.

Disciplinary history: There are no pending material litigations or legal proceedings against the Research Analyst. As on date, no penalties / directions have been issued by SEBI under the SEBI Act or Regulations made thereunder against the Research Analyst relating to Research Analyst services.

Details of the RA's associates: No associates.

Usage of Website Content: This Website is controlled and operated by the RA. All material, including research reports, recommendations, portfolios, ratings, lists of financial products, illustrations, statements, opinions, views, photographs, products, images, artwork, designs, text, graphics, logos, button icons, images, audio and video clips and software (collectively, “Content”) are protected by copyrights, trademarks and other intellectual property rights that are owned and controlled by the RA or by other parties that have licensed their material to us.

Except where otherwise agreed in writing with the RA, material on the Website is solely for the client’s personal, non-commercial use. Except as provided below, the client must not copy, reproduce, republish, upload, post, transmit or distribute such material in any way, including by e-mail or other electronic means and whether directly or indirectly and the client must not assist any other person to do so.

Without the prior written consent of the RA, modification of the materials, use of the materials on any other web site or networked computer environment or use of the materials for any purpose other than personal, non-commercial use is a violation of the copyrights, trademarks and other proprietary rights, and is prohibited. Any use for which the client receives any remuneration, whether in money or otherwise, is a commercial use for the purposes of these Terms.

The client may occasionally distribute a copy of a research report, or a portion of the same, from the Website in non-electronic form to a few individuals without charge, provided the client includes all copyright and other proprietary rights notices in the same form in which the notices appear, original source attribution, and the phrase “Used with permission from PrimeInvestor Financial Research Pvt. Ltd.”

While the client may occasionally download and store research reports or information from the Website for his/her personal use, he/she may not otherwise provide others with access to the same. The foregoing does not apply to any sharing functionality we provide through the Website that expressly allows the client to share Content or links to Content with others. In addition, the client may not use Content he/she has downloaded for personal use to develop or operate an automated trading system or for data or text mining.

The client agrees not to rearrange or modify the Content available through the Website. The client agrees not to display, post, frame, or scrape the Content for use on another website, app, blog, product or service, except as otherwise expressly permitted by these Terms. You agree not to create any derivative work based on or containing the research products and Content. The framing or scraping of or in-line linking to the Services or any Content contained thereon and/or the use of webcrawler, spidering or other automated means to access, copy, index, process and/or store any Content made available on or through the Services other than as expressly authorized by us is prohibited.

The client further agrees to abide by exclusionary protocols (e.g., Robots.txt, Automated Content Access Protocol (ACAP), etc.) that may be used in connection with the Research Services. The client may not access parts of the Research Services to which he/she is not authorized, or attempt to circumvent any restrictions imposed on your use or access of the Services.

As a general rule, the client may not use the Content, including without limitation, any Content made available through one of our RSS Feeds, in any commercial product or service, without our express written consent.

The client may not create apps, extensions, or other products and services that use our Content without our permission. The client may not aggregate or otherwise use our Content in a manner that could reasonably serve as a substitute for a subscription to the Website.

The client may not access or view the Services with the use of any scripts, extensions, or programs that alter the way the Services are displayed, rendered, or transmitted to you without our written consent.

The client agrees not to use the Services for any unlawful purpose. We reserve the right to terminate or restrict the client's access to the Website if, in our opinion, the client's use of the Services may violate any laws, regulations or rulings, infringe upon another person's rights or violate these Terms.

Prohibited content: The Website includes comments sections, blogs and other interactive features that allow interaction among clients and between clients and the RA. We call the information posted by or contributed by users “Contributed Content.” In the course of availing of the Research Services or uploading any post or comment on the Website, the client shall not post any Contributed Content that (i) contains nude, semi-nude, sexually suggestive photos, (ii) tends or is likely to abuse, harass, threaten, impersonate or intimidate other users of the Website and/or Research Services, (iii) is lascivious or appeals to the prurient interest or if its effect is such as to tend to deprave and corrupt persons who are likely to use or have access to the Website and/or Services, or (iv) otherwise violates, is prohibited or restricted by applicable law, rule or regulation, is offensive or illegal or violates the rights of, harms or threatens the safety of other users of the Website and/or Services (collectively “Prohibited Content”).

We reserve the right to cease to provide the client with the Research Services or access to the Website, or terminate your subscription, with immediate effect and without notice and liability, for violating these Terms, applicable law, rules or regulations and reserves the right to remove Prohibited Content which is in violation of these Terms, or is otherwise abusive, illegal or disruptive. The determination of whether any content constitutes Prohibited Content, violates these Terms, or is otherwise abusive illegal or disruptive, is subject to the sole determination of the Firm.

Changes to Research Services: We are constantly endeavouring to improve the quality of Research Services provided to our clients. Due to this, the form and nature of the Research Services provided may change from time to time without any prior notice to the client. We reserve the right to introduce and initiate new features, functionalities, components to the Website and/or Research Services and/or change, alter, modify, or discontinue existing ones without any prior notice to the client.

Warranty and liability disclaimer: The Website, Research Services, and all the materials and services, included on or otherwise made available to the client through this Website is provided by the RA on an “as is” and “as available” basis without any representation or warranties, express or implied except otherwise specified in writing. Without prejudice to the foregoing paragraph, the RA does not warrant that:

  • This Website and/or Research Services will be constantly available, or available at all;
  • The information on this Website or provided through the Research Services is complete, true, accurate or not misleading; or
  • The quality of any products, services, information, or other material that you obtain through the Website or Services will meet your expectations.

The RA, to the fullest extent permitted by law, disclaims all warranties, whether express or implied, including the warranty of merchantability, fitness for particular purpose and non-infringement. The RA makes no warranties about the accuracy, reliability, completeness, or timeliness of the Website, Research Services, Content, Contributed Content, Services, software, text, graphics and links.

The RA does not warrant that this Website, Research Services, information, content, materials, or any other material included on or otherwise made available to you through this Website, their servers, or electronic communication sent by the RA are free of viruses or other harmful components.

Nothing on this Website constitutes, or is meant to constitute, advice of any kind.

Indemnification: The client:

  1. Represents, warrants and covenants that no materials of any kind provided by him/her will:
    1. Violate, plagiarise, or infringe upon the rights of any third party, including copyright, trademark, privacy or other personal or proprietary rights; or
    2. Contain libellous, Prohibited Content or other unlawful material;
  2. Hereby agree to indemnify, defend and hold harmless the RA and all of the RA’s officers, directors, owners, agents, customers/clients, information providers, affiliates, licensors and licensees (collectively, the “Indemnified Parties”) from and against any and all liability and costs, including, without limitation, reasonable advocate’s fees, incurred by the Indemnified Parties in connection with any claim arising out of any breach by the client of these Terms or the foregoing representations, warranties and covenants. The client shall cooperate as fully as reasonably required in the defence of any such claim. The RA reserves the right, at its own expense, to assume the exclusive defence and control of any matter subject to indemnification by the client.

Applicable law: This Website, including the Content and Contributed Content and information contained herein, and the provision of Research Services shall be governed by the Securities and Exchange Board of India, laws of the Republic of India and the courts of Chennai, India which shall retain exclusive jurisdiction to entertain any proceedings in relation to any disputes arising out of the same. As such, the laws of India shall govern any transaction completed using this Website.

Information gathered and tracked: Information submitted or collected on the Website or pursuant to the use of the Services is stored in a database. Specifically, we store the username, name, e-mail address, contact number, as submitted or collected on our Website or through the provision of the Research Services. We may use such information to send out occasional promotional materials, including alerts on new Services available, or other promotional and marketing material relating to our clients and customers.

In accordance with the Information Technology Act 2000, the name and the details of the Grievance Officer at PrimeInvestor is provided below:

Mr. Srikanth Meenakshi
PrimeInvestor Financial Research Pvt. Ltd., Registered office: 659, 4th Avenue, D-Sector, Anna Nagar Western Extension, Chennai 600 101.
Email: [email protected]

11. Mandatory notice:

Clients shall be requested to go through Do’s and Don’ts while dealing with RA as specified in SEBI master circular no. SEBI/HO/MIRSD-POD-1/P/CIR/2024/49 dated May 21, 2024 or as may be specified by SEBI from time to time.

12. Optional Centralised Fee Collection Mechanism:

SEBI has operationalized a centralized fee collection mechanism for IA and RA. Under this mechanism, clients shall pay fees to IAs/RAs through a designated platform/portal administered by a recognized Administration and Supervision body. This is an optional mechanism for the registered entities. At this time, PrimeInvestor has opted out of this fee collection mechanism. Therefore, all subscription payments for the Research Services will be through the modes as specified in Clause 5 of these Terms.

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