Latest news with #NFOs
Economic Times
03-06-2025
- Business
- Economic Times
NFO Insight: Nippon Income Plus Arbitrage Active FoF opens. Is it time to add this emerging category to your portfolio?
This fund aims to provide stable, tax-efficient returns by strategically allocating assets between debt and arbitrage opportunities. Nippon India Mutual Fund's latest new fund offer of Nippon India Income Plus Arbitrage Active Fund of Fund is open for subscription and will close on June 11. The fund is an open-ended hybrid fund of fund scheme investing in debt and arbitrage primary investment objective of the scheme is to achieve stable returns while navigating market volatilities for its investors which will be pursued by strategically investing in a diversified portfolio of open-ended debt oriented schemes, and units of arbitrage funds of Nippon India Mutual Fund or any other mutual fund(s). Also Read | Volatile Markets and SIPs: What should mutual fund investors do? Nippon India Income Plus Arbitrage Active FOF attempts to provide a better risk adjusted and tax efficient solution for conservative investors. The product seeks to invest in a combination of Debt Funds (less than 65%) and Arbitrage Funds (> 35%) to lower the volatility and offering better tax efficiency for investment tenure of over 2 years,' Saugata Chatterjee, President and CBO at Nippon India Mutual Fund shared with ETMutualFunds.'The product can be considered by investors seeking lower volatility investment solutions with better tax efficiency compared to other traditional alternatives,' he further added. The fund will allocate 95-100% in units of arbitrage fund and debt mutual fund schemes and 0-5% in debt and money market instruments. Nippon India Income Plus Arbitrage Active Fund of Fund is an actively managed fund. The scheme shall invest in units of arbitrage and debt-oriented schemes subject to permissible limits The scheme has the flexibility to manage its allocation of its assets between arbitrage fund and debt-oriented schemes after evaluating various parameters like arbitrage spreads between the cash market and future and options market, credit risk, interest rate risk, liquidity risk and others as found suitable by the fund managers. According to a report by ETBureau, Income plus Arbitrage FoF is a new category of schemes that invest a little less than 65% in fixed income with the balance in arbitrage strategies and some funds also invest in schemes of other fund houses. Experts typically ask investors to avoid investing in NFOs unless they offer something unique. The uniqueness could be that the scheme is offering an investment option that is not available in the market or offering something extra to an existing option. Otherwise, the experts believe investors are better off with an existing scheme with a long performance record. This is because you have some historical data to base your investment decision. You don't have any data when it comes to new to an expert, Income Plus Arbitrage Funds combine high-quality debt and equity arbitrage strategies to deliver low-volatility, tax-efficient returns. Also Read | Smallcap mutual funds offer 8% average return in May, all equity mutual fund categories end with gains 'They're designed for investors seeking stability without locking into traditional debt products. While this NFO is new, those with a 2–3-year investment horizon and low risk appetite can consider a limited allocation, especially if looking for better post-tax outcomes than typical debt funds,' Sagar Shinde, VP Research at Fisdom shared with this category, if the scheme is held for two years, gains are taxed at the rate of 12.5% and if less than two years, the gains are added to investors income and are taxed as per slab rates and these funds are used by investors as debt allocation for tax efficiency, the ET Bureau report expert believes that as Income Plus Arbitrage Funds are hybrid mutual fund schemes that invest in a combination of debt instruments and arbitrage strategies, they offer debt-like stability with added benefit of tax-efficiency and in the current market scenario, conservative investors can consider these funds.'Income Plus Arbitrage Funds are hybrid mutual fund schemes that invest in a combination of debt instruments and arbitrage strategies. Arbitrage involves exploiting price differences between the cash and derivatives markets to generate returns with minimal risk . These funds aim to offer debt-like stability with the added benefit of tax efficiency. Given the current market conditions, it may be suitable for conservative investors seeking stable returns with lower tax implications,' Adhil Shetty, CEO of asserted are around nine funds based on this theme of which one is newly launched and for other eight funds, the respective fund houses have changed the scheme fundamental attribute in the current calendar year. Among these nine funds, UTI Income Plus Arbitrage Active FoF was launched on April 4. Some of the name changes were - Aditya Birla Sun Life Active Debt Multi Manager FoF was rebranded as Aditya Birla Sun Life Debt Plus Arbitrage FoF. Bandhan All Seasons Bond Fund became Bandhan Income Plus Arbitrage Fund of Funds. HSBC Managed Solutions India Growth Fund was renamed HSBC Aggressive Hybrid Active FoF, while Kotak All Weather Debt FoF was restructured as Kotak Income Plus Arbitrage FoF. At present, Union Income Plus Arbitrage Active FOF is under its NFO period and will close for subscription on June 5. Baroda BNP Paribas Income Plus Arbitrage Active Fund of Fund (FoF), Tata Income Plus Arbitrage Active Fund of Fund, and SBI Income Plus Arbitrage Active FOF have completed their NFO period on May 21, May 19, and April 30 Franklin Templeton Mutual Fund announced the change in fundamental attribute of Franklin India Multi-Asset Solution Fund of Fund and the name of the scheme will be changed to Franklin India Income Plus Arbitrage Active Fund of Funds effective from July 4. Also Read | Best mutual fund SIP portfolios to invest in June 2025 Shetty is of the opinion that post the 2023 Budget, gains from traditional debt funds are taxed at the investor's slab rate, making them less attractive for those in higher tax brackets, these funds work by allocating up to 65% in debt instruments and the remaining in arbitrage opportunities, balancing stability and potential returns and while they offer tax advantages and lower volatility, they may not entirely replace traditional debt funds due to their relatively shorter track record and slightly higher expense the other hand, Shinde explains that with arbitrage spreads attractive and interest rates expected to soften, these funds are well-positioned to offer stable returns and they act as substitutes for short-duration debt funds, especially for those in higher tax brackets. 'The mix of fixed income and arbitrage helps them deliver predictable performance with low volatility. However, they work best when held for at least 2–3 years to benefit from favourable taxation and reduce reinvestment risk,' Shinde further shares with these existing funds based on this particular theme, eight have a performance record of one year. ICICI Pru Income plus Arbitrage Active FOF has offered the highest return of around 11.60% in the last one year, followed by DSP Income Plus Arbitrage FoF which offered 10.58% return in the same Income Plus Arbitrage Active FOF and HDFC Income Plus Arbitrage Active FOF offered 7.93% and 5.47% returns respectively in the last one the performance of these funds in the last one year, the experts recommend an allocation of 5-10% or 10-20% in the fixed income portion. Also Read | An underrated solution, finding its due: Radhika Gupta reacts on tax-efficient options beyond equities Shinde shared the allocation one can have and mentioned that a 5–10% allocation in the fixed-income bucket is reasonable and these funds are best suited for investors seeking steady returns over a 2–3-year time frame. 'With a stable rate environment, surplus liquidity, and high-quality debt exposure, the outlook remains constructive. The combination of dynamic allocation and tax efficiency adds to their appeal in the current market setup,' he to the ETBureau story, with equity valuations running high, risk-averse investors are maintaining their distance from the stock market. But to affluent investors seeking tax-efficient options beyond equities, a new breed of mutual fund strategies offer compelling such as arbitrage funds, income plus arbitrage FoFs, multi-asset allocation and precious metal funds (gold/silver) are gaining traction. These funds typically avoid direct equity exposure while offering better post-tax returns than traditional fixed income, the story further recommends that given their moderate risk profile and tax efficiency, Income Plus Arbitrage Funds can be considered as a supplementary investment, especially for those in higher tax brackets seeking stable returns over a medium-term horizon and the suggested allocation could be around 10-20% of the fixed-income portion of one's portfolio. 'The outlook for these funds is positive, especially in volatile markets where arbitrage opportunities are more prevalent. However, investors should be mindful of the fund's expense ratio and the potential variability in returns based on market conditions,' he further shared with should always invest based on their risk appetite, investment horizon, and goals. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Mint
31-05-2025
- Business
- Mint
Stock market this week: Top gainers and losers you can't afford to ignore
India's Gross Domestic Product (GDP) registered a robust growth of 7.4% in the January–March quarter of the financial year 2024–25, surpassing market expectations and marking the highest quarterly growth in the past year. This strong performance reflects the continued momentum in economic activity, driven by resilient domestic demand, increased government spending, and a steady revival in key sectors such as manufacturing, construction, and services. The manufacturing sector, in particular, witnessed notable growth, supported by improved industrial output and rising capacity utilization. The services sector also maintained its upward trajectory, with increased activity in finance, real estate, and professional services. Additionally, infrastructure development and higher capital expenditure by the government contributed positively to the growth figures. Agriculture, although subject to seasonal variations, remained stable and supported rural consumption. 2. Belrise Industries made a strong debut in the market, getting listed at a premium of 11.11% over its issue price of ₹ 90, reflecting investor confidence and positive market sentiment. Similarly, Borana Weaves was listed at a premium of 12.5% over its issue price of ₹ 216, indicating robust demand and favorable reception. In addition to these listings, several recent Initial Public Offerings (IPOs) witnessed healthy oversubscription levels. The IPO of Aegis Vopak Terminals was oversubscribed by 2.20 times, while Schloss Bangalore saw even stronger interest, being oversubscribed by 4.72 times. These figures suggest strong participation from investors across categories. Notably, the IPO of Prostarm Info garnered exceptional attention with an oversubscription of 96.68 times, marking a significant milestone in terms of demand and investor enthusiasm. Similarly, the IPO of Scoda Tubes Info attracted substantial interest, being oversubscribed by 57.37 times. These oversubscription numbers highlight the high level of interest in the primary market and the growing participation from retail and institutional investors. The successful listings and strong subscription figures reflect an active IPO market and demonstrate investor optimism toward emerging companies across various sectors. The momentum seen in these offerings underscores the ongoing vibrancy in India's capital markets. 3. Several asset management companies have recently launched New Fund Offers (NFOs), adding a diverse range of investment options to the mutual fund landscape. Motilal Oswal AMC introduced the Motilal Oswal Services Growth Direct Plan, aiming to tap into the potential of India's expanding services sector. ICICI AMC launched the ICICI Prudential Nifty200 Quality 30 Index Growth Direct Plan, offering investors an opportunity to invest in a quality-focused index composed of 30 high-ranking companies from the Nifty 200 universe. Nippon India AMC rolled out the Nippon India BSE Sensex Next 30 Index Growth Direct Plan, which aims to capture the performance of the next line of large-cap companies beyond the Sensex 30. Union AMC has launched the Union Income Plus Arbitrage Active FoF Growth Direct Plan, a fund of funds designed to deliver steady returns through arbitrage opportunities, with active allocation strategies. Unifi AMC introduced the Unifi Flexi Cap Growth Direct Plan, a flexible investment approach that spans across large-cap, mid-cap, and small-cap segments to leverage opportunities across market capitalizations. These NFOs reflect a dynamic and evolving market environment where AMCs continue to introduce innovative products to cater to varied investor preferences, focusing on sectoral growth, quality indices, and flexible asset allocation strategies. Index Returns Best Performers Worst Performers Bought and Sold Most Watchlisted Kuvera is a free direct mutual fund investing platform. Unless otherwise stated data sourced from BSE, NSE and kuvera.
Mint
24-05-2025
- Business
- Mint
Stock market this week: Top gainers and losers that flipped fortunes in five trading days
Debt mutual funds experienced a robust 20.5% surge in their assets under management (AUM) during the financial year 2024–25 (FY25), signaling renewed investor confidence in fixed-income instruments amid evolving macroeconomic conditions. According to data released by the Association of Mutual Funds in India (AMFI), the AUM of debt-oriented schemes expanded significantly, rising from ₹ 12.62 lakh crore in March 2024 to ₹ 15.21 lakh crore by the end of March 2025. Additionally, with the Reserve Bank of India maintaining a relatively stable monetary policy stance through much of the year, longer-duration debt instruments became more attractive, leading to higher inflows into categories like corporate bond funds, gilt funds, and banking & PSU debt funds. Retail participation has also risen, supported by greater financial awareness and the convenience of digital platforms making debt fund investments more accessible. The initial public offerings (IPOs) of Borana Weaves and Belrise Industries witnessed an overwhelming investor response, underscoring the strong momentum in India's primary markets and growing investor appetite for new listings. Borana Weaves' IPO was oversubscribed by a staggering 147.85 times, reflecting exceptional interest from all investor segments, including retail investors, high-net-worth individuals (HNIs), and qualified institutional buyers (QIBs). This level of oversubscription indicates immense confidence in the company's business model, financial health, and future growth prospects, particularly in the textile sector, which is benefiting from rising export demand and government support for manufacturing. The massive subscription numbers also suggest that the issue was attractively priced and backed by a compelling investment narrative. Several leading asset management companies (AMCs) have recently launched New Fund Offers (NFOs), reflecting the evolving preferences of Indian investors and a growing demand for diversified and thematic investment options. Canara Robeco AMC has introduced the Canara Robeco Multi Asset Allocation Growth Direct Plan, aiming to provide investors with exposure across equity, debt, and commodities for balanced risk and return. Baroda AMC, in collaboration with BNP Paribas, has launched the Baroda BNP Paribas Multi Asset Active FoF Growth Direct Plan, another fund-of-funds structure targeting asset diversification. SBI AMC and ICICI AMC have both unveiled offerings tracking the Nifty200 Quality 30 Index through their SBI Nifty200 Quality 30 Index Growth Direct Plan and ICICI Prudential Nifty200 Quality 30 Index Growth Direct Plan respectively, appealing to investors seeking quality-focused portfolios within a passive structure. Motilal Oswal AMC's Services Growth Direct Plan provides sector-specific exposure, focusing on India's expanding services industry. Nippon India AMC's BSE Sensex Next 30 Index Growth Direct Plan targets the next-tier large-cap stocks, potentially offering growth beyond traditional Sensex constituents. Union AMC has introduced the Union Income Plus Arbitrage Active FoF Growth Direct Plan, catering to conservative investors looking for stable returns through arbitrage strategies. Lastly, Unifi AMC's Flexi Cap Growth Direct Plan offers flexibility in market capitalization, aiming to capture value across segments. These NFOs reflect the increasing innovation and customization in India's mutual fund industry. Index Returns Best Performers Worst Performers Bought and Sold Most Watchlisted Kuvera is a free direct mutual fund investing platform. Unless otherwise stated data sourced from BSE, NSE and kuvera.
Time of India
21-05-2025
- Business
- Time of India
NFO Insight: Can Motilal Oswal Services Fund help you gain stability and long-term growth potential?
Motilal Oswal Mutual Fund 's latest new fund offer of Motilal Oswal Services Fund is open for subscription and will close on June 3. The fund is an open-ended equity scheme investing in the services sector The scheme will open for continuous sale and repurchase on June 16. Motilal Oswal Services Fund aims to generate long-term capital appreciation by investing in companies that derive the majority of their income from businesses operating in the services sector of the economy. CEO comment on launch Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Julio: Liquidación de boletos de cruceros sin vender (Mira precios) Cruceros para mayores | Anuncios de Búsqueda Más información Undo 'India's services sector has consistently demonstrated strong and resilient growth, emerging as a key driver of the country's economic development. With its rising contribution to GDP, robust export potential, and growing digital and consumer-driven demand, we believe the sector may offer compelling long-term investment opportunities. Our new Sectoral fund is designed to tap into this structural growth story and enable investors to gain exposure to the services-led transformation of India's economy,' said Prateek Agrawal, MD and CEO, Motilal Oswal Asset Management Company. Fund manager's take 'Services sector encompasses a wide range of industries—benefiting from rising incomes, urbanization and digital adoption. With structural tailwinds and improving export competitiveness, we see long-term potential across this sector. The fund will be benchmarked against Nifty Services Sector Total Return Index (TRI) which has shown an upward trend over the 11-year,' said Bhalachandra Shinde , Associate Fund Manager, Motilal Oswal Mutual Fund. Live Events 'From an initial level around 1000 in April 2014, the index has steadily increased, reaching a level of 4518 by April 2025. Our investment approach will focus on identifying quality businesses with scalable models and strong fundamentals that are well-positioned to benefit from this sector,' he added. Experts take on new launch Experts typically ask investors to avoid investing in NFOs unless they offer something unique. The uniqueness could be that the scheme is offering an investment option that is not available in the market or offering something extra to an existing option. Otherwise, the experts believe investors are better off with an existing scheme with a long performance record. This is because you have some historical data to base your investment decision. You don't have any data when it comes to new offerings. According to an expert, the fund being a sectoral or thematic fund is unique in its way that unlike other thematic/sectorial funds, it is not concentrated in a single category but diversified across a broad range of industries, such as the infrastructure theme. Cautioning the investors about the fund or sector/theme, Arjun Guha Thakurta, Executive Director, Anand Rathi Wealth Limited recommends that investors should avoid investing in this sector or theme, 'as we have not seen much existing funds in this theme to understand the theme's performance across different market cycles. Additionally, thematic/sectoral funds tend to undergo cyclical performance.' Another expert, post sharing India's services growth mentions that as we have not seen much existing funds in this theme to understand the theme's performance across different market cycles. Additionally, thematic/sectoral funds tend to undergo cyclical performance. 'As a smart investor, if you believe in India's growth story then service sector stocks should be a part of your core portfolio. So yes, market corrections should be seen as an opportunity to invest in promising service sector companies,' said Shruti Jain, Chief Strategy Officer, Arihant Capital Markets The scheme will be benchmarked against Nifty Services Sector Total Return Index and will be managed by Bhalachandra Shinde, Ajay Khandelwal, Atul Mehra, Rakesh Shetty, and Sunil Sawant. The scheme aims to generate long-term capital appreciation by investing in equity or equity related investments of companies that are engaged directly or indirectly or expected to benefit from the growth and development of the services sector in India. Emerging sector According to MOAMCs internal research, India's services sector has emerged as the most consistent and resilient contributor to the country's Gross Value Added (GVA), reflecting stable performance. Between FY23 and FY25, the sector achieved growth of 8.3%, underpinned by a surge in services exports, which accelerated to 12.8% in April–November FY25 from 5.7% in FY24. The sector's significance is further highlighted by its massive 109-fold increase in contribution to total GVA since FY14, according to a press release by the fund house. As a share of total GVA, the sector grew from 52% in FY16 to 55% in FY24, peaking at 56% in FY23. This highlights the services sector's growing role in India's economic output and its contribution to employment, currently supporting nearly 30% of the workforce. On the global stage, India ranks 7th in services exports, with 4.3% share. Notably, the sector has remained in the expansionary zone for 41 consecutive months since August 2021, underscoring its stability and long-term growth potential, the release said. The minimum investment amount for lumpsum is Rs 500 and in multiples of Re 1 thereafter. For monthly SIP, the minimum investment amount is Rs 500 and in multiples of Re 1 thereafter with minimum 12 installments. The scheme will allocate 80-100% in equity and equity related instruments of companies which derive a majority of their income from business in the services sector of the economy, 0-20% in equity and equity related instruments of other than services sector companies and overseas securities, 0-20% in debt and money market instruments (including cash and cash equivalents), 0-10% in units of REITs and InvITS, and 0-5% in units of mutual funds . Should one allocate? Based on the investment pattern of the fund, Thakurta firmly recommends investors to avoid investing in sectoral/thematic funds as these tend to undergo cyclical performance as they are highly concentrated in only a single category of industries. He instead recommends investors to invest in diversified equity funds, such as market cap-based funds and strategy-based funds, such as value, contra & focused, which give exposure across the range of sectors & categories and help to ride across the market cycles. However, Jain recommends that the service sector should have a significant allocation to every investor's portfolio who is betting on India but the actual allocation would depend on your risk profile, and other factors as for any equity investment, one should have a horizon of 6-10 years to mitigate the volatility and get real benefit. One should wait for at least 3-5 years to assess the performance of a service sector based fund before investing but investing in an old fund with a proven track record is a better choice than picking a NFO , especially if a similar fund is there in the market and if you invest in a diversified fund, it will automatically have a good percent of the portfolio invested into service sector stocks, considering how these companies have shown strong growth in last two decades said Jain. The scheme is suitable for investors who are seeking capital appreciation over the long term and investing predominantly in equities and equity related instruments of companies engaged in the services sector of the economy. Apart from Motilal Oswal Services Fund, there are two other funds based on this sector who have a track record of being in the market in the last five years. ICICI Prudential Exports & Services Fund has offered 28.66% return in the last five years and Sundaram Services Fund offered 29.68% return in the same time period. In the last one year, the schemes have offered 14.26% and 19.17% respectively. With two funds available for investment based on the service sector and this new NFO, Thakurta believes that the sector is expected to perform well and remain a structural growth engine, and emerge as a key driver of both domestic consumption and exports. 'With rising urbanization, digital penetration, and formalization, sub-sectors like financial services, healthcare, IT, telecom, and logistics are poised for multi-year growth. However, based on this, investing in a single sector is not recommended as it will increase the concentration risk associated with the performance of a single sector,' he adds. One should always invest based on their risk appetite, investment horizon, and goals. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ along with your age, risk profile, and Twitter handle.
Economic Times
14-05-2025
- Business
- Economic Times
NFO Insight: Can this multi asset allocation fund save your portfolio in this volatile market?
ET Online Experts suggest multi-asset funds offer diversification and cushion against market volatility, though some advise caution due to lack of control over asset allocation. Canara Robeco Mutual Fund's latest new fund offer of Canara Robeco Multi Asset Allocation Fund is open for subscription and will close on May 23. The fund is an open-ended scheme investing in equity and equity related instruments, debt and money market instruments, Gold ETFs, and Silver scheme will open for continuous sale and repurchase on June 6. Canara Robeco Multi Asset Allocation Fund will follow an active investment strategy and aims to generate long-term capital appreciation through predominantly investing in a mix of Equity & Equity related Instruments, Debt & Money Market Instruments, Gold ETFs, Silver ETFs, units of REITs and InvITs and such other asset classes as SEBI may prescribe from time to time. "The launch of Canara Robeco Multi Asset Allocation Fund not just expands our product offerings, it also enhances our ability to provide investors with diversified solutions tailored to meet the evolving needs of the market,' said Rajnish Narula, Chief Executive Officer, Canara Robeco Asset Management Company. 'By continually developing new funds for investors, we aim to empower them to build resilient portfolios that may align with their financial goals, while also fostering our culture of continuous improvement and excellence in product development," he added. Also Read | MF Tracker: Can this large & mid cap scheme add spunk to your portfolio in this market? Experts typically ask investors to avoid investing in NFOs unless they offer something unique. The uniqueness could be that the scheme is offering an investment option that is not available in the market or offering something extra to an existing option. Otherwise, the experts believe investors are better off with an existing scheme with a long performance record. This is because you have some historical data to base your investment decision. You don't have any data when it comes to new offerings. According to an expert, one can invest in multi-asset allocation funds in the current market scenario as these funds offer the advantage of built-in diversification by mandating exposure to at least three distinct asset classes, with a minimum allocation of 10% in each and additionally this structure reduces the reliance on any one asset class and helps cushion the impact of equity market adds that as these asset classes have low or negative correlation with each other, decline in one segment is often offset by stability or gains in another.'Being actively managed, the fund would dynamically adjust its allocations in response to changing market conditions. This not only helps manage risk more effectively but also removes the burden from investors of having to make asset allocation decisions themselves, besides creating higher tax efficiency,' recommended Vishal Dhawan, CEO, Plan Ahead Wealth Advisors, a wealth management firm in expert recommends that one should consider investing in such a way that you are diversified across equity and debt, by investing in pureplay equity and debt funds.'Multi asset allocation funds allow you to primarily invest in equity and debt, gold as a mix. This is a type of hybrid fund where you are investing in different asset classes. However, when it comes to such funds, it is difficult for an investor to keep track of the asset allocation, which is an important metric an investor should keep track of for their portfolio,' said Chirag Muni, Executive Director, Anand Rathi Wealth LimitedShridatta Bhandwaldar, Head – Equities at Canara Robeco Asset Management Company said that, 'Canara Robeco Multi Asset Allocation Fund aims to deliver reasonable returns with lower volatility over long term. The equity portion will aim to provide long term capital appreciation while gold and silver ETF allocation will aim to act as a hedge against inflation and uncertainty, and debt allocation will aim to provide balance to the portfolio.''We believe the fund can provide a strategic edge to investors, and aim to give them an opportunity to potentially capture the upside whilst likely reducing the downside impact,' he Jain, Head - Fixed Income, Canara Robeco Asset Management Company commented that, "The fund will have the flexibility to invest across debt and money market instruments and across durations, making it suitable for investors looking for diversification across asset classes.''The fund will manage duration dynamically and hence will likely make sense for investors looking to participate in markets whilst mitigating losses during downturns,' he adds. Also Read | Quant Small Cap Fund increases stake in Shipping Corporation of India, NCC, and 8 other stocks The scheme will allocate 65-80% of the total assets towards equity and equity instruments, 10-25% towards Gold and Silver ETFs and 10-25% towards debt and money market instruments. The scheme may also invest in REITs and equity portion of the fund would be a market capitalization, style and sector agnostic and would aim to invest in high conviction portfolio with leaders with proven track record across market cycles which could provide strength and compounding to the portfolio as well as in emerging companies with improving market share to lend alpha to the portfolio through superior earnings growth, according to a press release by the fund the same time, actively managed Gold and Silver Exchange Traded Funds (ETFs) exposure and dynamic fixed income portfolio could provide hedge and strength, respectively, to the fund manager of the scheme is responsible for making buy / sell decisions for the scheme's portfolio and seeks to develop a well-diversified portfolio taking into account the asset allocation pattern of the Scheme along with risks that are associated with such investments. The investment decisions are made on an ongoing basis keeping in view the market conditions and other regulatory on the investment pattern of the multi asset allocation funds, Dhawan recommends an allocation of 10% to 20% of their overall portfolio to this category, depending on their risk appetite and investment horizon and one can also purchase these funds through SIP or STP, both methods help average out the cost of investment and bring in a level of rupee cost other expert shares a different view that as the investor does not have control over the asset allocation in the case of multi asset allocation funds and therefore, we do not suggest that one take exposure in a multi asset category at all. 'If you want gold exposure for personal goals, opt for a gold ETF with limited exposure. Debt and gold both are defence assets and together they should form a maximum 20% in the portfolio whereby gold and other can be within a range of 5-10%. Ideally opt for 80:20 in equity and debt,' Chirag said. Canara Robeco Multi Asset Allocation Fund will be benchmarked against 65% BSE 200 TRI + 20% NIFTY Short Duration Debt Index + 10% Domestic Price of Gold + 5% Domestic Price of Silver. The scheme will be managed by Amit Kadam, Ennette Fernandes, and Kunal Jain. Also Read | Edelweiss Mutual Fund lifts lumpsum cap on Recently Listed IPO Fund; Radhika Gupta shares why the timing is right to invest Multi-asset allocation funds are hybrid funds that need to invest a minimum of 10% in at least 3 asset classes. These funds typically have a combination of equity, debt, and gold. Some schemes also add international equities, InvITs and equity allocation in the case of multi-asset funds could vary between 0-70%. Aggressive multi-asset funds could typically have 50-65% equity while the conservative ones could have between 35-50%. In the case of multi-asset funds, some schemes that allocate more than 65% to equity enjoy equity of Anand Rathi Wealth mentions that multi asset allocation funds may be suitable for beginners who would find it difficult to keep track of their asset allocation strategy or have a very small portfolio and therefore, the challenge is that you will not be able to keep track of your market cap exposure and it would be difficult to ascertain whether you are adequately invested in large, mid and small cap in the right manner. Multi asset allocation funds are suitable for investors with a moderate to aggressive risk tolerance, without having to manage different fund categories. Investors having a long-term investment horizon of 5 years and those who prefer lower volatility as compared to equity mutual funds can invest in this category is what Dhawan recommends. Rebalancing between asset classes will be internal hence investors do not incur capital gains tax each time the portfolio is rebalanced. Based on allocation by Canara Robeco Multi Asset Allocation Fund it will be taxed like an equity-oriented fund that is taxed at 20% (if units are sold within 12 months) and if sold after 12 months at 12.5% (on gains above ₹1.25 lakh) + 4% cess, Dhawan further shares the tax structure of multi asset allocation to the fund house, investors looking for diversification across asset classes should invest in this fund. Additionally, the investors with a very high-risk appetite and long-term investment horizon of five years and above and investors trying to moderate their participation in market rallies while mitigating potential losses can go for this are around 23 multi asset allocation funds in the market who have completed one year of existence. WOC Multi Asset Allocation Fund has delivered the highest return of 17.10% in the last one year. DSP Multi Asset Allocation Fund delivered 13.51% return in the same period. HDFC Multi-Asset Fund has offered a return of 12.05% in the said period. Bandhan Multi Asset Allocation Fund was the last one in the list to offer double-digit returns of around 10.46% in the similar time period. Quant Multi Asset Fund was the last one to deliver the positive return in the said time period. The scheme has offered 5.22% return in the last one year. Also Read | Parag Parikh Flexicap Fund crosses Rs 1 lakh crore AUM: Neil Parikh Motilal Oswal Multi Asset Fund and Shriram Multi Asset Allocation Fund lost 8% and 1.39% respectively in the last one recommending the allocation to have in portfolio, Dhawan comments that one can hold multi asset allocation funds in the portfolio especially in volatile markets as they can help preserve capital and deliver more stable returns over time compared to pure equity funds. 'Gold, for instance, has emerged as one of the strongest-performing asset classes in recent years, especially during times of global uncertainty. Its presence in the portfolio can act as a natural hedge, offering protection when equities are under pressure. However, it is important for investors to understand the fund's asset allocation model and strategy as this will influence how the fund performs across different market cycles,' he other expert sticks to avoiding multi-asset allocation funds as they do not provide control over the asset allocation and NFOs are generally best avoided, as they lack a performance track record and the fund manager's strategy is often unclear and unlike IPOs, NFOs offer no price advantage. One should always invest based on their risk appetite, investment horizon, and goals. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ along with your age, risk profile, and Twitter handle.
