The Marathon Plan in Finideas’ Index Long-Term Strategy follows a structured investment approach with specific cost components. Below is a breakdown of the costs involved:

1. Hedging Cost

• Represents 5% of the total exposure value, which is Rs. 10 Lakhs in this example.
• This cost is incurred for purchasing Put Options to hedge against market downturns.

2. Futures’ Forwarding Cost

• Calculated as 5% of the Futures’ exposure, which is Rs. 5 Lakhs (5% of Rs. 1 Crore).
• This cost is associated with rolling over Nifty Futures contracts periodically.

3. Gross Cost

• The sum of Hedging Cost (5%) and Forwarding Cost (5%), totaling 10% of the total exposure.
• In this example, the Gross Cost amounts to Rs. 15 Lakhs.

4. No Earnings from Debt Funds

• Unlike the Relax Plan, the Marathon Plan does not allocate any capital to Debt Funds, meaning no interest earnings are available to offset costs.

5. Net Cost (15%)

• Since there is no debt investment to generate returns, the net cost remains 15% of the investment amount.
• Total Net Cost = Rs. 15 Lakhs (Rs. 10 Lakhs Hedging Cost + Rs. 5 Lakhs Forwarding Cost).

The Marathon Plan is designed for investors who are willing to take moderate risk for potentially higher returns while utilizing leverage and hedging strategies effectively.