WhiteOak Capital Mutual Fund has launched the ‘‘WhiteOak Capital Balanced Hybrid Fund’, which is an open-ended balanced scheme investing in equity and debt instruments. The New Fund Offer (NFO) opened from today (October 5, 2023) and will remain open till October 19, 2023. 

In a statement, WhiteOak Mutual Fund said the investment objective of the scheme is to provide long-term capital appreciation and generate income by investing in a balanced portfolio of equity and equity-related instruments and debt and money market securities. The scheme is benchmarked against CRISIL Hybrid 50+50 Moderate Index. 

WhiteOak Capital Balanced Hybrid Fund could be a simple way to participate in both Equity and Debt asset classes, wherein equity will provide higher wealth creation opportunities in the long term and debt will provide stability to one’s portfolio. 

WhiteOak Capital Balanced Hybrid Fund aims to achieve not only reasonable returns over time, but to reduce the intermittent volatility associated with pure equity allocation, the statement said. It further added that the fund provides a hassle-free and tax-efficient way of investing in Debt and Equity via Single Mutual Fund Scheme. 

Investment in this scheme is also eligible for Long Term Capital Gain Tax with Indexation Benefit, with holding period of more than three years. 

“Originally, Balanced Funds were supposed to be just ‘Balanced’. But because of tax considerations, they took anywhere ranging from 65%-80% exposure in equity, thereby going ‘Off  Balance’. So much so that they had to be renamed as ‘Aggressive Hybrid Funds’. But taxation should never be your prime consideration in determining what risk you take to drive returns,” said Aashish Somaiyaa, CEO, WhiteOak Capital Asset Management  Limited.

“In any case, the current tax regime is not adverse if a fund is managed as a balanced hybrid fund by holding three years, rather than taking high equity to reduce tax impact; thus, the “Balance” can be restored. This scheme will keep rebalancing allocation to 50:50 at periodic intervals to provide better balance vis-à-vis aggressive hybrid funds on a risk-adjusted basis,” he added. 

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“Investors often make mistakes when they are exposed to extremes of market conditions or asset classes. They end up generating sub-optimal returns from investments because of huge intermittent volatility. One of the simple but effective strategies to follow is the ‘Balanced Approach’ of having Growth Asset (Equity) and  Stability (Debt) in the portfolio. With WhiteOak Capital Balanced Hybrid Fund we intend to follow a simple approach to Portfolio Asset Allocation that can help avoid exposing the portfolio to extreme volatility and,  at the same time, can earn reasonable returns over time,” said Prateek Pant, CBO, WhiteOak Capital Asset Management Limited.

Fund allocation 

As per the statement, the fund allocation includes investing 40-60% in Equity and Equity Related Instruments (including foreign securities) and 40-60% in Debt Securities (including securitized debt) and money market instruments, cash, and cash equivalents and /or units of domestic liquid mutual fund schemes across various sectors. Under normal circumstances, the asset allocation philosophy of the scheme shall rebalance back to strategic asset allocation of 50%, whenever external asset allocation limits (i.e. 40% or 60%) are breached due to market movement. However, the final portfolio can have higher or lower allocation depending on the prevailing market scenario.

Disclaimer: The above content is for informational purposes only, based on a press release shared by WhiteOak Capital Asset Management Ltd. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.