WhiteOak Capital Mutual Fund has announced the launch of a new fund that gives investors an opportunity to diversify across various assets in a single investment. It is an open-ended scheme investing in equities, debt and money market securities in addition to gold, silver related instruments. Within equities, the fund will hold stocks both in Indian and global markets. Thus, by investing in this scheme, an investor is not only able to diversify across assets but also geographically.
The NFO of the fund titled ‘WhiteOak Capital Multi Asset Allocation Fund’ is open till May 10, 2023.
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Aashish Somaiyaa, CEO, WhiteOak Capital Mutual Fund says, “We are launching our Multi Asset Allocation Fund which aims to generate superior ‘Risk Adjusted Returns’ for conservative investors who appreciate the nuances and benefits of dynamic asset allocation. Our fund managers will perform not only security selection but also multi-asset portfolio construction in creating a portfolio to achieve reasonable returns with moderate volatility over the long term.”
Investors need to be aware that economic cycles and markets across the globe are very dynamic. Depending on where we are in the economic cycle, global scenarios, geopolitical events, etc., different asset classes often behave in different ways.
In the calendar year 2022, here is how various assets performed:
Gold was the top performer clocking gains of 13.9% followed by Indian equities at 5.7%. The other asset classes, like liquid funds, gave 5.1% returns, while real estate returned 2.8%, Debt 2.5%. While foreign equities delivered negative returns in INR terms amongst key markets such as US equities (S&P 500) -9.1% , MSCI DM -9.1%, MSCI EM -11.3% and the Nasdaq -25.1%.
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These asset classes have varied degrees of correlation with each other. Investors can use these correlations in creating a portfolio to achieve reasonable returns with moderate volatility from their investment over long term.
Prateek Pant, CBO, WhiteOak Capital Mutual Fund says, “The WhiteOak Capital Multi Asset Allocation Fund will invest across asset classes which include Domestic and Foreign Equity, Debt, Gold. Each asset class performs differently during various market cycles. A judicious mix of these asset classes helps in reducing portfolio volatility and generating reasonable returns over longer time periods.”
WhiteOak Capital Multi Asset Allocation Fund invests in various asset classes, such as Equity, Debt, Gold, and Foreign Equities, dynamically using the Internal Proprietary Model to figure out the relative attractiveness of these asset classes. Our team at WhiteOak Capital has developed an internal proprietary model to assess the relative attractiveness of these asset classes and would seek to allocate and rebalance dynamically with an aim to deliver superior “Risk Adjusted Returns” to investors,” Pant adds.
The scheme will be benchmarked against S&P BSE 500 TRI (40%) + CRISIL Composite Bond Index (40%) + Domestic prices of Gold (10%) + Domestic prices of Silver (10%).
The allocation will happen across assets in the following manner:
15% to 45% towards Domestic Equities
10% to 55% towards Fixed Income
10% to 40% towards Gold
0 to 10% towards Foreign Equities, out of the total net assets.
“Generally, equities are expected to do well during periods of an economic recovery. On the other-hand bonds tend to do well during the recession and falling interest rates scenarios. While no investment is guaranteed to be recession-proof, some asset classes tend to perform better than others during downturns. During periods of inflationary pressures, commodities like gold, metals, oil, etc. usually see an upswing in prices,” informs Pant.