Dynamic Income Provider
Dynamic Income Provider Profile
MCB Funds has introduced Dynamic Income Provider (DIP) which will help you maintain your purchasing power over time. MCB Funds has recognized that the investors need to maintain their basic lifestyle over time. Dynamic Income Provider is especially suitable for retired persons and those dependent on income from investments.
Retired and struggling to beat inflation?
Your current investment income may cover your household expenses today but it is likely to cover only half of your household expenses five years from now and the position will get worse as time goes on.
How it works
The investor may choose any term between 15,20 and 25 years. The plan breaks the total of the invested amount into two parts: Part A and Part B. Part A is invested in Pakistan Income Fund (PIF), which is targeted to earn approximately the prevailing rate of inflation. Part B is invested in MCB Pakistan Stock Market Fund (MCB-PSM) and is targeted to grow to a meaningful amount by the end of the plan. Monthly cash flows will be generated for the investor from Part A, so as to maintain the purchasing power throughout the term of DIP. All dividends declared for PIF and MCB-PSM, will be reinvested in the same funds at their respective ex-dividend NAV (repurchase price), therefore no front end or back end load will be applicable. The allocation of investment amounts between PIF (Part A) and MCB-PSM (Part B) for fixed terms would be as follows:
Potential to beat inflation
By targeting monthly income inline with inflation, Dynamic Income Provider is likely to provide effective protection against inflation.
At the present, the account may be started with Rs. 1,000,000.
In addition to the risks disclosed in the Offering Document of the Pakistan Income Fund and MCB Pakistan Stock Market Fund, the investment in the Dynamic Income Provider (MCB Funds Dynamic Income & Drawdown Plan) is exposed to the following risk:
The expectation that the Plan will provide inflation protection is based on the performance of the Pakistan Income Fund and the ability to continue investing in similar investments on maturity of the investments in the portfolio. There is no guarantee as to the actual performance of the Pakistan Income Fund.
The probability that the portion invested in MCB-PSM will accumulate to a meaningful amount by the end of the Plan period is based on the expectation that MCB-PSM and the equity market will perform in line with expected economic growth of the country.
Under extreme circumstances it is possible for PIF and MCB-PSM to loose value. Furthermore, the units held by the Subscriber in the plan can deplete in case sufficient returns are not earned to pay for the amount of monthly payment.