What is trigger?

Triggers are options provided to the Unit holder enable automatic switch on the happening of the desired event. Triggers can help Investor make the most of market movements without the hassle of constant tracking. It provides information (alert based trigger) / initiates action (action based trigger). The Unit holder can specify a specific event/action, which may be related to time or value or a specific event/action in advance and when this event/action takes place the trigger will get activated. If thenUnit holder has opted for alert based trigger, this facility will "ALERT" (via Mail/SMS) the Unit holder after meeting the specifications provided by the investor. If the Unit holder has opted for action based trigger, the system will process the transaction (switch ) on the basis of the specifications provided by the Unit holder.
How is a Trigger useful to the Investor? Trigger facility helps the Unit holders to minimize the loss and/or timely book the profits. Also trigger is an additional facility provided to the Unit holders to save time on completing switch formalities on happening of a particular predetermined event

Who sets / defines the trigger? The Unit holder has to set the Trigger.

Who executes the Trigger? The AMC will execute the trigger on the Unit holder's behalf.

How does the Trigger work? A Trigger will activate a transaction / alert when the event selected for has reached the value greater than/ equal to the specified particular value i.e. Trigger Point. Eg: Mr. Z bought 5000 units at NAV of 11.00. If Mr. Z wants to switch all his units when the NAV reaches 15.00, he has to keep track of the NAV daily and then send a switch request within a stipulated time period for effecting the switch at the NAV of the intended day. However, instead of keeping a track of the NAV everyday, Mr.ZA can set a Trigger: To switch all units when NAV is 13 or more. In this case, the AMC will keep track on behalf of Mr. Z and switch his units on the day when the NAV reaches 13 or more. Thus Trigger is useful in financial planning. What are the different kinds of triggers available to the Unit holders?

The various types of Triggers available to the Unit holder are: a. Event-based Triggers: Unit holder can also set triggers based on the occurrence of a particular external event that affects the value of investment. For example, Value of investment reaches or crosses a particular value Investment Value appreciates by specified % Capital appreciation of a particular amount NAV reaches or crosses a particular value NAV appreciates by specified % Switch on a particular day or date BSE Sensex Rise/Fall by specific points/percentage BSE /NSE Sensex reaches specific points/percentage NSE NIFTY Rise/Fall by specific points/percentage b. Time based Triggers: Time based triggers are actioned on the day and /or date opted by the investor. For e.g. If investor has opted particular day or date trigger for redeeming specified amount to buy some gift for his/her relatives birthday, a trigger could be set based on the date as requested by the Unitholder or Investor can give a redemption request before a specific date - 25th Wedding Anniversary, retirement date, three years from date of trigger or son/daughter reaches the age of 21 What are the various options available to the Unit holders on the activation of action based Trigger? On the day of the happening of the event the Unit holder can choose from the following options Full switch from Liquid Scheme into other schemes of Quantum Mutual Fund Switch of certain number of units Switch of certain amount Switch of only gains into other schemes of Quantum Mutual Fund Switch original investment amount in Liquid scheme of any other scheme. Switch Gain amount in Liquid Scheme to any other schemes

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Can a Unit holder apply for Trigger for multiple transactions in one Trigger request? No. Use separate trigger application form for each transaction of a scheme/plan /option.

Will the intra-day points of BSE/NSE be considered for transactions on the day of the activation of the Trigger? No. Only end of the day closing points of BSE/NSE will be considered for activating the trigger. Percentage rise/falls will be calculated by taking the base index as on the investment date.

What is the base for activation of the Trigger? If the trigger is a time based trigger, the time event prescribed by the Unit holder would be the base of activation of the trigger. If the trigger is event based, the happening of the event prescribed by the Unit holder is the base for activation of the Trigger.

Which value will be considered for trigger execution in Investment Value/NAV change? The end of the day NAV based Price of Investment on the day of registration of the trigger will be compared with the NAV based Price of Investment (without considering exit load) of each subsequent business day till the occurrence of the trigger event prescribed by the Unit holder. How is the application for a trigger made? The application for a trigger is made by submitting the duly filled and signed Trigger application form at designated Investor Service Centers of Quantum Mutual Fund. Where the Trigger Form is available? Trigger Form is available at all designated Investor Service Centers of Quantum Mutual Fund and website www.QuantumAMC.com. Can a trigger once activated be set again? Yes. You can select the recurring trigger option available in Trigger Form. However, if the said option is not selected, a fresh request for activation of the same has to be made. Can a set trigger be modified? Yes, the Trigger can be modified by submitting a duly signed request letter. Three (3) days time is required to update the modified trigger request at our end. Is there a limit on number of triggers options that can be set? No. Unit holder can select multiple Trigger options available in the form. However, out of selected options, trigger will be actioned only for the option which meets the set criteria prior to other options. How is the Unit holder informed about the execution of the trigger? The Unit holder is informed about the execution and the subsequent transaction through the SMS/physical/E-mail account statement as opted in Application form. Can I submit trigger request after partial switch out? Yes, In case Trigger request is received after partial switch-out from the Original Invested amount in liquid scheme, then the said trigger will be actioned after fulfillment of the Original invested amount. Example: - Investor invested Rs.30,000/- on 1/2/2010 , and switched 5,000/- on 20/4/2010. Trigger request for appreciation is received for transaction (of 30,000/-) on 15/05/2010. Trigger will be actioned after the original invested amount reaches Rs.30, 000/-

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Trigger facility in Mutual Fund

A trigger is an actionable facility that allows you to specify an exit target (linked to value or time) at the time of investing in a scheme, or at a subsequent date. The moment this target is achieved, the trigger gets activated. Signing up for the trigger facility doesn't mean you are locked into the scheme till the terms specified by you are met. A trigger is just a supplement. You can exit any time you wish to, regardless of whether your target has been met or not. Besides, you can cancel the trigger or specify new terms while you are invested in the scheme. How does it Work? Investors decide a trigger point in an index or scheme. On reaching the point, investors can shift funds or gains into another scheme. Fund houses such as Birla Sun Life, HDFC, IDFC and Principal PNB are now introducing such facility in select schemes whereby an investor can switch funds invested in one scheme to another, after a certain pre-determined level of an index or a specified amount of gain has been achieved by the first scheme. It is the investor who chooses from a set of options to decide what would be this predetermined trigger. It could be the reaching of a particular level of a particular index, or a certain percentage gain made by the scheme itself. The investor's investments from the equity scheme would be transferred to a predetermined debt scheme or vice versa. What types of triggers exist? Broadly speaking, triggers are based on value and time. Value triggers. As the name suggests, such triggers set a particular value as a target. This could be the total value of your holdings in the scheme or its NAV (net asset value). Say, you invest Rs 10,000 in an equity scheme, when its NAV is Rs 10. You feel the market can rise 30 per cent in the near future-and would like to cash in. So, at the time of investing, you define a trigger that gets activated when the value of your holding appreciates to Rs 13,000, or when the scheme's NAV touches Rs 13. Another way of defining the trigger in this case is a 30 per cent rise (called the percentage trigger). Date triggers. Such triggers get activated only on a day specified by you. It could also be linked to a holding period-you decide at the outset that you want to consider exiting a scheme after two years.

Variants. IDBI and IL&FS have tweaked these basic trigger types to suit their schemes and their investors. For instance, IDBI offers an index trigger (linked to the Sensex and the Nifty), as well as part withdrawal of investment on activation of the trigger-withdraw the gains and reinvest the principal. Who should opt for triggers? The trigger facility is for passive investors who don't track their mutual fund investments. They can put in place realistic, achievable triggers. Once those targets are achieved, they can decide what to do with their investment. How to make triggers work for you? - Have an objective in mind - Set a realistic target - Think of the end-use of sale proceeds Schemes - Birla Sun Life Mutual Fund has introduced such a facility in the growth option of Birla Sun Life Frontline Equity Fund. - HDFC Mutual Fund too is offering a Flexi-index plan that would allow an investor to automatically transfer his investments from the select debt or liquid schemes to select equity schemes at Sensex levels of the investor's choice. - IDFC Mutual fund has introduced a facility called "Auto Trigger Facility" under "IDFC Money Manager Fund - Treasury Plan - Plan D". - Reliance Mutual Fund has already filed a draft offer document for a "target appreciation" scheme with SEBI. UTI's Variable Investment Scheme is based on the lines of a target returns philosophy.

Learn to be trigger happy

In the past few years, many retail investors have seen a dream run on Dalal Street turn into a nightmare because they failed to book a timely profit. It happened in January 2008, when the Sensex soared to 21,000 and then plummeted to 8,000 by October. This year, too, the BSE benchmark touched the 18,000 mark in mid-January, fell to 16,000, only to touch 18,000 once again. It's a frequent misadventure suffered by individual investors as they find it difficult to rein in their greed when the markets are on a roll. To curb this tendency, several fund houses offer the trigger facility. It's a tool that allows the investor to set a target and redeem his investments if their value crosses a predetermined limit. "Usually, investors don't book profits when the market is rising. Instead, they shift their target upwards," says Sanjay Parekh, senior fund manager, ICICI Prudential Mutual Fund. "Realisation sets in only when the markets undergo a correction and they end up losing their gains or even a part of their principal," he adds. Indeed, it is a rare investor who sells his stocks when the markets start moving up. As it's virtually impossible to predict the future movement of stocks, anyone who thinks he can time the market is fooling himself. According to experts, one should invest in equities with a long-term perspective, yet, periodic booking of profits is essential, especially in these volatile times. Unless an investment is redeemed, the profit remains only on paper. It is crucial for investors to know when to sell and realise the gains, especially if they have to reach financial goals. For mutual fund investors, this need to book profits is partly taken care of if they opt for the dividend payout option. However, the timing and quantum of the dividend payout is at the discretion of the fund house and the investor has little say in it. Click here to Enlarge

It is here that the trigger facility offered by many fund houses plays a crucial role and empowers the investor. One can choose from a variety of customised triggers (see box). Some are based on price, others are linked to the percentage of returns, yet others are time-based. Also, a trigger can be used for a particular transaction or a series of transactions during a specified period. For instance, an investor can opt to redeem all his equity fund units if the NAV crosses a certain level. He will not have to monitor the markets and then take an investment call. If the trigger has been activated, the mutual fund will automatically take the required action. So, if you had bought units when the NAV was Rs 10 and want to book profits when it reaches Rs 12, instead of having to keep track of the NAV and then submit a redemption request, you can set a trigger to redeem all units when the fund's NAV crosses Rs 12. The trigger level can range between 5 per cent and 100 per cent of the appreciation and enables an investor to save time on redemption formalities. "By predetermining a target, an investor avoids getting carried away by emotions. This makes the investment process more objective," says Parekh. Most fund houses are offering this facility for their equity schemes. Newer fund houses, such as the Edelweiss Mutual Fund, offer more than 14 trigger options and 10 actions to choose from. You can redeem your entire investment or only your gains or even a certain number of units. You also have the option of switching to a relatively safer option, such as a short-term debt fund or a liquid fund, from the same fund house. The trigger facility assumes greater importance in volatile times. If you opt to shift from an equity fund to a debt fund, the trigger will help you book profits, but ensure that your money continues to grow. You don't have to redeem the investment completely. Activating the trigger facility is fairly simple. Just fill up a form specifying the action needed and submit it to your mutual fund. Make sure you understand how the trigger works. If you have opted for a one-time trigger, the fund will deactivate it once the action is completed. In case it is a repetitive trigger, the fund house will continue making the changes as specified. A note of caution: the trigger facility should not be seen as a reason to invest in a fund. The Target Return Fund from ICICI Prudential AMC has a mandatory trigger option, under which the investment is shifted to a debt scheme after 12 per cent, 20 per cent, 50 per cent or 100

per cent appreciation. This compulsory trigger is only under the growth option. The unique feature that the fund offers is that it provides an entry trigger facility, which enables an investor to switch from debt schemes to the Target Return Fund on achieving predefined trigger levels. This trigger is based either on the BSE Sensex values (in multiples of 100) or a percentage drop (5 per cent, 10 per cent, 15 per cent and 20 per cent) in the NAV of the Target Return Fund. However, the fund has not had enough time to prove itself and has underperformed the category since its launch in May 2009. Investors might be better off if they opt for an established fund that offers a trigger facility. Experts also feel that triggers should be used only if the investor understands the implications. "Although the trigger facility is a good check on greed, it is counterproductive to long-term saving, especially if the investor does not know what to do with the money being withdrawn," says Dhirendra Kumar, CEO, Value Research. It's important to keep the tax incidence in mind before setting a trigger. Whenever a redemption is triggered, the investor makes a capital gain or loss. If it is an equity fund and the investment was made over a year ago, there is no tax to be paid since long-term capital gains from equities are tax-free. Such gains are likely to be taxable once the Direct Taxes Code comes into effect next year (see Tax Watch, page 87). If the investment term is less than a year, 15 per cent tax is payable on gains from equity funds. This In the case of debt funds, the long-term capital gains are taxed at 10 per cent and short-term gains taxed at the marginal rate. An investor might also have to pay an exit load. To overcome these problem, the Tata PE Fund from Tata Mutual Fund offers investors an automatic dividend trigger option. An investor can set a limit of, say, 5 per cent or 10 per cent of the NAV. As soon as the NAV crosses the threshold specified by the investor, a dividend is automatically paid from the NAV. This mode ensures a tax-free income in the hands of the investor because dividends are not taxable. However, one can receive a dividend only once in a quarter. "Pre-set dividend triggers serve as an effective hedging tool against the volatile nature of equities," says a fund manager at Tata Mutual Fund. The Tata Equity PE Fund follows an automatic profit booking strategy. The fund invests at least 70

per cent of its assets in shares whose trailing PE is less than that of the Sensex. If the 30 per cent limit for shares of higher PEs is breached, the fund needs to sell and rebalance. Sometimes, the fund has an inbuilt trigger. The Franklin Templeton Dynamic PE Ratio Fund is a fund of funds that invests in equities based on the PE of the Nifty. When the Nifty PE is low, say 12-16, the fund invests 70-90 per cent of its corpus in equities. As the markets rise and the Nifty PE goes up, the fund progressively reduces its exposure. In early January 2008, when the Nifty PE was above 25, the fund had only 10-30 per cent of its corpus in equities. Taking a cue from mutual funds, life insurance companies are also offering the trigger advantage to investors in unit-linked insurance plans (Ulips). ICICI Prudential Life Insurance allows investors in the Pru LifeTime Maxima Ulip to give instructions for automatic rebalancing of their Ulip portfolio. Under the trigger portfolio strategy, investments are distributed between the Multi-Cap Growth Fund and Income Fund in a 75:25 ratio. If the NAV of the Multi-Cap Growth Fund moves beyond the limit specified by the investor, the company rebalances the portfolio. "The idea is to protect the gains made in the equity markets from any future volatility and, at the same time, maintain a predefined asset allocation structure," says Pranav Mishra, senior vice-president and head of product and sales, ICICI Prudential Life. 7 types of triggers and how they work 1.Value trigger: Redemption/switch is triggered when the investment reaches a value defined by you. 2.Nav-based trigger: Comes into effect when the NAV hits a certain value or changes by a specified percentage. 3.Date trigger: Redemption/switch occurs on a date specified by you. 4.Capital gains trigger: Comes into effect when there is capital appreciation of a certain percentage or amount. 5.Reinvesting gains: Allows one to redeem or reinvest when the requisite period for realisation of long-term capital gains is reached. 6.Downside trigger: It's based on a stop loss concept, where one can specify the value or percentage that is lower than the investment amount.

7.Index-based trigger: Comes into play when the BSE/NSE rises by specific points or hits a certain level.

Mutual Fund investments: Avail trigger by AMCs to fix a level to invest or redeem
Khyati Dharamsi, ET Bureau Aug 8, 2011, 01.47am IST

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trigger| mutual funds

Our busy schedules leave us little time to track the markets and know exactly when to invest in a mutual fund scheme or when to exit one. If you don't want to lose out on investing opportunities, a good idea is to avail of the trigger facility provided by asset management companies (AMCs). This tool allows you to fix a date, price or index level at which you want to enter the market and get out when the expected returns have been achieved. "When the market starts moving up, investors often raise their previously set targets without booking profits. Realisation sets in only when the market corrects itself and reaches a level where investors either fail to gain or even lose their investments," says Sankaran Naren, CIO equity, ICICI Prudential AMC.

The trigger mechanism is especially useful for passive and conservative investors, who can set a trigger amount or a percentage of appreciation, and based on this, their money can be shifted from equity funds to debt funds. Kalpen Parekh, deputy CEO at IDFC Mutual Fund, says, "It helps you build a profit discipline so that you accumulate at the right time and exit when your return expectations are met." So, one can choose targets based on near-term goals, such as buying a laptop or going for a holiday. Says Ajit Menon, executive vice-president and head of sales at DSP BlackRock Mutual Fund: "This feature can help investors and financial advisers in planning for financial goals." DSP BlackRock is the latest fund house to have introduced this facility this month, joining the AMCs that have been offering it for the past couple of years. These include Birla Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund, IDFC Mutual Fund, Principal Mutual Fund, Reliance Mutual Fund, Tata, Quantum and UTI Mutual Fund. Different types of triggers There are several trigger options (see Types of Triggers), though these differ between fund houses. However, each of these will help you earmark the point at which you want to redeem your funds or shift from one type of fund to another. For instance, if you choose to switch appreciated capital, you can fix a percentage of gain, say 10%, 30% or 50%. When your investment amount grows by this figure, the profit you have earned can be moved to debt funds, while the original amount remains in the equity fund.

What Are The Different Kinds Of Triggers In Mutual Fund And When To Use Them
May 7th, 2010 by

rupeetalk.com

A gain cannot be called a gain until it is realised. How true is this when it comes to mutual fund investments! Prasoon, 35, invested a considerable amount in equity mutual funds in early 2006 when the market was up. His investments almost doubled within a span of 9 months and then the global crisis hit the Indian market, crashing it like never before. Till now, Prasoon has not recovered his invested amount. He blamed his fund managers, including his advisor, for the loss. In Prasoon's case, when the market tanked, he lost the gain he had made till then. He did not get a chance to either redeem the profit or transfer it to another fund. Had trigger facility available then, Prasoon wouldn't have lost his money.

What is trigger facility? Trigger facility is an add-on, optional feature provided in mutual fund schemes, which enables investors to book profit automatically at a pre-defined time or value. In another words, it is an event in which the fund will declare dividend, redeem and/or switch the units automatically on behalf of the investor on the date of the happening of the event.

Highlights

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Triggers enable MF investors to register profit irrespective of market conditions Investors can choose a trigger point based on NAV, date and value of investment The dividend declared is either redeemed or switched to another scheme at a pre-defined value or time

Are there different types of triggers available? A plethora of choices are available to the investor when it comes to choosing a trigger. The most common of them are based on capital appreciation, date and value of NAV. The trigger point can either be an appreciation in NAV by a pre-defined percentage or an appreciation in an investment value or a specified date, etc. The various kinds of triggers available to the investor are presented in Table 1. Table 1: Different Types of Triggers

Value Trigger Date Trigger Downside Trigger Upside Trigger Index-based Trigger Dividend Trigger How it works?

Investment amount reaching a particular value Redeem on a date specified by investors Redeem if the investment goes down by a defined level Redeem if the investment goes up by a defined level Trigger based on Sensex/Nifty values Dividend declaration if the investment goes up by a defined level

Let us assume that you have invested in a trigger-activated equity mutual fund scheme at a NAV of Rs. 10 and have set the trigger at 20 per cent NAV appreciation. Once the NAV reaches Rs. 12, the trigger gets activated automatically, and your gains will be either redeemed or transferred to any of the debt schemes as decided by you. Thus, trigger provides a convenient and useful financial planning tool, especially for those who want to earn a sizeable profit within a period of time.

Read: Have I made the right investment?

What are the tax issues? Whether payout under a trigger-activated mutual fund scheme is subject to tax or not will depend on what type of trigger you have opted for.

In case of redemption or switch, it is similar to Systematic Withdrawal Plan (SWP) where your investment units are redeemed minus exit charges, if any, and you need to pay short-term gain tax (STGT) if redeemed within one year.

In case of 'dividend trigger', as in Tata Equity PE Fund, the fund manager announces the record date for dividend within 5 working days from the date of occurrence of trigger, i.e., when the target for NAV appreciation is achieved. Thus, investors are exempt from paying any exit load and STGT.
Pros and cons of 'trigger' A trigger facility is a blessing, here is why:

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You do not have to track your investments all the time You do not have to worry about volatile market conditions as your notional gains are realised when the market moves up.
However, you need to exercise caution while selecting a trigger option, here is why:

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A trigger ceases to exist once the switch takes place. After booking profits at a particular trigger level, you lose an opportunity to earn gains in near future in case the market continues an upward trajectory.

Switch carried out with the help of trigger option cannot be reversed in any condition.
What are the risks involved? Firstly, investors should be cautious in deciding the debt fund schemes (target schemes in trigger facility) as they carry interest rate and pricing risk, thus there are chances of the gain in equity getting wiped out by the loss in debt schemes. So, it is better to stick to liquid fund schemes for any switch proceeds.

Secondly, if there is any trigger within one year, investors will have to pay short-term gain tax and exit load on your redemptions which can be as high as 16 per cent (15 per cent (STGT) + 1 per cent (Exit Load)).

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A little more about dividend trigger in Tata Equity P/E Fund Tata Mutual Fund has offered a dividend trigger facility in its star performing scheme Tata Equity P/E Fund. This facility allows automatic dividend payments when the net asset value (NAV) of the scheme moves up by a pre-determined percentage, i.e., 5 per cent or 10 per cent. Thus an investor makes most of the opportunity by booking profits or reinvesting the gains when the market moves up, and there is no disappointment on his/her part when the market crashes. So how this takes place actually? Once the NAV appreciates say by 10 per cent, the record date for dividend is announced within 5 working days from the date of occurrence of trigger. Once a trigger is done, no second dividend will be declared in the current quarter. Even if the NAV remains above the trigger level, the next dividend will be declared on the 1st day of next quarter. Thus, possibility of multiple dividend triggers would ensure repeated automatic profit booking by way of dividends at pre-determined trigger levels. It serves as a useful tool against the volatile nature of equity investments. In addition, this method exempts investors from paying any short-term gain taxes and exit loads (if withdrawn within one year) unlike in other trigger options as there is no dividend distribution tax (DDT) on equity-oriented schemes. Some of the mutual fund schemes providing this facility are shown in Table 2. Table 2: Mutual Funds Offering 'Trigger' Facilities Mutual Funds/Schemes Tata Equity PE Fund ICICI Prudential Target Returns Fund Birla SunLife Mutual Fund IDFC Money Manager Fund Reliance Mutual Fund Fidelity Investments UTI Mutual Fund Trigger Levels 5% or 10% 12%, 20%, 50% or 100% 15%, 30%, 50% or 100% 10% 10% (Min.) 10% (Min.) Customised Category Dividend Value Value Value Value Value Mixed

* This list is not exhaustive; investors are requested to check with Mutual Funds Conclusion The idea behind offering trigger facility is simple: to retain mutual fund customers who have become jittery on account of the fluctuating market. So it is no secret that the facility works well when the market conditions are volatile. However, investors must be cautious in selecting the target level for triggers. The choice of target depends upon investment horizon. Investors with a long investment horizon may choose a target from 50 to 100 per cent based on their risk appetite.

Published on May 7, 2010 Filed under:

Stocks Articles;

Investors can use trigger option for strict trading

Arnav Pandya, TNN Jun 14, 2002, 02.01am IST

Investors often have a tough time monitoring their investments. A common lament among the investor community is how their holdings reached astronomical heights but today is worth very little because of the fact that they did not cash out. Even though many investors vow to be disciplined the next time around, it is very difficult to stick to the resolve especially in a situation where sentiment is either too elated or too depressed. Mutual funds on their part have witnessed a situation wherein a lot of investors held on to their units during the technology boom and these depreciated significantly thereafter. Now these funds are providing their investors with additional facilities so that they can make informed decisions and become disciplined in their investments. One such additional facility is that of a trigger facility. This enables the investor to ensure that he meets his targets and is not left holding the units even after the fund has moved in an opposite direction. Let us understand what exactly is a trigger option and how investors can make use of this effectively. In simple words this is a facility that is provided by mutual funds to their customers whereby the investor can select an occasion when he would like to redeem or switch his units. Let us make the use of an example to understand this situation. Assume that an investor has bought some equity mutual fund units worth Rs 10,000 at Rs 10 per unit. The expectation of the investor is to record a gain of 35 per cent. Ideally the investor would like to sell the units when the net asset value (NAV) reaches Rs 13.50 assuming that the units are redeemed at NAV without any load. The difficulty in fulfilling this condition arises on account of the fact that an investor would have to monitor his investments daily to find out when the fund crosses this figure. Another worry is that by the time the figure reaches the intended target and there is optimism all round the investor might think that a higher NAV, say Rs 15, is an achievable target. However if the NAV goes down again there is a chance that even the target of 35 per cent might not be achievable.

As against this, if a trigger option had been activated then the investor would have booked his 35% gain when the NAV crosses the intended level.