Should I invest in stock market in 2022 or buy gold? If you are wondering which asset class will perform in 2022 and in years ahead, you may end up at the wrong end. It’s better to be diversified across asset classes such as equity, debt and gold. ICICI Prudential Passive Multi-Asset Fund of Funds is a new scheme launched by ICICI Prudential Mutual Fund, the NFO of which closes on January 10, 2022. It is an open ended fund of funds scheme investing in equity, debt, gold and global index funds or exchange traded funds.
The scheme’s primary objective to generate returns by predominantly investing in passively managed funds launched in India and/or overseas. As an investor, one gets exposure to various asset classes in a single investment.
The Benchmark of the ICICI Prudential Passive Multi-Asset Fund of Funds is CRISIL Hybrid 50+50- Moderate Index (80% weightage) + S&P Global 1200 Index (15% weightage) + Domestic Gold Price (5% weightage).
There are four key things to know about the ICICI Prudential Passive Multi-Asset Fund of Funds – One, it is a FoF scheme, Two, it is a passively managed fund, Thirdly, being a multi-asset, your investments gets allocated to equity,debt, gold in one-go and fourthly, the scheme gives you international exposure as well.
Also, although it is a passive fund, there is an active role of the fund manager to regularly monitor the investment environment to mitigate potential risks and provide tactical allocation to a particular sector. There is an active involvement in identifying asset class mix including exposure to select and innovative range of global ETFs. The Scheme may invest in any ETFs or Index Fund launched by any other mutual fund in India.
ICICI Prudential Passive Multi-Asset Fund of Funds provide diversification across equities, debt and gold. The asset allocation will be:
Domestic Equity ETFs/Index Funds (25%-65%)
Domestic Debt ETFs/Index Funds (25%-65%)
Gold ETFs (0%-15%)
Overseas ETFs and Index Funds (10%-30%)
The global equity rally since April 2020 on the back of Fed induced liquidity is being considered to be over by many analysts. This leads to an environment where diversification makes more sense to manage risk-adjusted returns in the long term. A Multi-Asset fund suits those investors who want a simple investment solution while diversifying across asset classes.