The Parag Parikh IFSC S&P 500 and NASDAQ 100 Fund of Fund schemes are reducing their minimum initial investment from USD 5,000 to USD 500. The schemes have also lowered the partial redemption threshold and introduced a new 30-day investor consent process.
Two Parag Parikh IFSC funds are lowering the minimum amount required to start investing. The Parag Parikh IFSC S&P 500 Fund of Fund and Parag Parikh IFSC NASDAQ 100 Fund of Fund will reduce their minimum initial subscription from USD 5,000 to USD 500.
The change will apply to new subscriptions prospectively. The fund management entity (FME) will specify the effective date after ensuring operational readiness. The minimum additional subscription will remain at USD 500.
Smaller balance can remain after partial redemption
The schemes have also reduced the threshold linked to partial redemptions. If you redeem only part of your investment and the remaining investment falls below USD 100, the FME can redeem all the remaining units.
The earlier threshold was USD 1,000. This change will also apply prospectively from the effective date specified by the FME.
This means the amount that can remain invested after a partial withdrawal can be much smaller before the FME can exercise its right to redeem all remaining units.
Your silence can count as consent
A new Consent Procedure has also been added to the offer documents. When investor approval is required for a proposal, the FME will send the details electronically and give investors 30 calendar days to respond.
If you do not respond within this period, your silence will be treated as deemed consent or approval.
Once the required consent, including deemed consent, is received, the proposal can be implemented. Where the required approval is not received, dissenting investors will be provided an exit in accordance with the scheme’s redemption provisions.
For you, the practical point is simple: do not ignore communications from the fund when a proposal requiring investor consent is circulated. Not responding within the 30-day period could be treated as approval.
The changes have been made to the offer documents of both schemes. The revised minimum subscription and redemption threshold will take effect from the respective dates communicated by the FME.
What does this mean for you?
The lower minimum means you will need substantially less money to make an initial investment in either scheme once the change becomes effective.
The entry amount is falling by 90%, from USD 5,000 to USD 500. However, the lower minimum does not reduce the market risk associated with the underlying investments. The schemes continue to provide exposure to their respective US equity indices.
Source: Offer document addendums for the Parag Parikh IFSC S&P 500 Fund of Fund and Parag Parikh IFSC NASDAQ 100 Fund of Fund.
