The mutual fund industry as many of you may be aware is undergoing turbulent times. Downbeat macroeconomic variables along with global economic headwinds, has brought in rampant volatility in the Indian capital markets, which in turn has resulted in low investor confidence. The mutual fund industry has been facing consistent equity folio closures in the past few months which is been a cause of concern for the Securities and Exchange Board of India (SEBI) as well.

But amid such a scenario, mutual fund houses are doing all they can to attract investors, especially the retail ones. Some time ago, IDFC Mutual Fund (the 8th largest fund house with asset of about Rs 39,000 crore as on June 30, 2013) introduced a new feature / benefit for its two schemes - IDFC Classic Equity Fund (a multi cap fund) and IDFC Sterling Equity Fund (a small cap fund), where if one invests in these schemes he /she would be entitled to a discount on various medical services. In order to provide such a benefit, IDFC Mutual Fund has tied up with Indian Health Organisation Ltd (IHO) – a leading health insurance organisation founded in 1853, which is a part of Aetna Inc. United States and is serving more than 35 million customers across the world. The main activity of IHO is to build a network of doctors, medical practitioners and hospitals.

How does the scheme work?
Well, to avail a benefit of a medical discount one needs to enrol for the Systematic Investment Plan (SIP), here termed as “SIP Care”. The benefit is not available for lump sum investments. Once you have enrolled for the same and submitted your application form to the mutual fund house, you will get a card which you need to present every time you visit a doctor, hospital or a medical facility centre. The “SIP Care” facility entitles you to get medical discounts at doctors’ clinics, dental clinics, pathology labs and even hospitals. It gets you access to the entire list medical fraternity empaneled with IHO. One can locate a doctor or medical facility centre on the website of IHO.

You see, when a doctor refers a patient to another doctor or a medical facility centre, he /she get her referral fee. But the IHO does not work on this model. Instead of asking for commission from doctors, they tell doctors empaneled with them to provide discounts to patients.

It is noteworthy that in order to avail such medical discounts one could alternatively, also subscribe to healthcare packages offered by IHO directly.

So should you opt for SIP care?
PersonalFN is of the view that prima facie the benefit offered under “SIP Care” is certainly valuable in today’s times of rising medical costs. But you would be bound by doctors and medical facility centres empanelled with IHO to avail a medical discount. Nonetheless in our view, the list seems extensive and decent with some reputed names.

As far as the mutual fund schemes are concerned to avail the benefit, IDFC Classic Equity Fund in our view is an average risk-low return investment proposition in the multi cap category. It has shown inconsistency in performance and has been underperforming its peers for quite some time. So one may be better-off avoid investments therein. IDFC Sterling Equity Fund on the other hand is a high risk-high return investment proposition in the small cap category. The fund has justified the higher risk it has taken and hence can be considered by risk-taking investors while availing the benefit of SIP Care offered by IDFC Mutual Fund.

Alternatively, as mentioned earlier in order to avail a medical discount facility one could also directly subscribe to healthcare packages offered by IHO.

PersonalFN also think that the aforesaid proposition from IDFC Mutual Fund may also tempt other mutual fund houses to provide such a medical discount benefit on mutual fund schemes from their stable by establishing strategic alliances.

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