The fund will invest in Indian equities, international equities, commodities and debt instruments.
Return from an investment portfolio is a function of the performance of the underlying asset classes such as equity, debt, gold and even commodities. As not all asset classes perform in a similar manner over time, one is required to diversify one’s portfolio, which largely decides the overall returns. In order to meet that need to keep one’s savings diversified across various assets, Nippon Life India Asset Management Limited (NAM India) has announced the launch of the Nippon India Multi-Asset Fund (NIMAF).
The New Fund Offer (NFO) opens for subscription on the 7th August 2020 and closes on the 21st August 2020. The scheme re-opens for continuous sale & repurchase not later than September 02, 2020. The minimum investment required is Rs 5,000.
Nippon India Multi-Asset Fund is an open-ended scheme looking at providing a one-stop solution which may help to reap the benefit of the growth of equity, the stability of debt and diversification from commodities.
The fund will invest 50 per cent of its assets in Indian equities, 20 per cent in international equities, 15 per cent in commodities and the remaining in Debt & Money Market Instruments. The benchmark will be – 50 per cent of S&P BSE 500, 20 per cent of Crisil Short Term Bond Fund Index & 30 per cent of Thomson Reuters – MCX iCOMDEX Composite Index.
The primary investment objective of Nippon India Multi Asset Fund is to seek long term capital growth by investing in equity and equity related securities, debt and money market instruments and Exchange Traded Commodity Derivatives and Gold ETF as permitted by SEBI from time to time.
The fund will be managed by Manish Gunwani, CIO – Equity Investments along with Ashutosh Bhargava, Fund Manager & Head Equity Research, Kinjal Desai, Fund Manager – Overseas; Amit Tripathi CIO – Fixed Income and Vikram Dhawan Head – Commodities.
How asset allocation helps
Over the last decade, there have been divergent returns among asset classes. Different Asset Classes outperform in different years. Between gold, equity and debt, over the 5-year period, gold has been the outperformer, equity over the last 3 years while debt has been the top performer over the last 2 years.
Different assets follow different cycles over different time periods. However, it is difficult to predict which asset class will outperform. Therefore, asset allocation is considered to be the key driver of portfolio returns which helps in portfolio diversification and could lead to optimal returns.