DSP Mutual Fund announced the launch of the DSP Multi Asset Allocation Fund, an open-ended scheme investing in equity/equity-related securities, debt/money market instruments, commodity ETFs, exchange-traded commodity derivatives, and overseas securities.
The scheme opened for public subscription on September 07, 2023, and will close on September 21, 2023.
What kind of mutual fund scheme is this?
This is an open-ended scheme investing in equity/equity-related securities, debt/money market instruments, commodity ETFs, exchange-traded commodity derivatives, and overseas securities.
As per the press release shared by the fund house, “DSP Mutual Fund House can invest between 35-80 per cent in equities, of which up to 50 per cent can be in international equities. It can also invest 10-50 per cent in debt, 10-50 per cent in Gold ETF, 0-20 per cent in other commodities through ETFs & ETCDs, and up to 10 per cent in REITs & InvITs.”
What is the main objective of investing in this fund?
The investment objective of the Scheme is to seek to generate long-term capital appreciation by multi asset classes including equity and equity-related securities, debt and money market instruments, commodity ETFs and exchange-traded commodity derivatives, and overseas securities.
However, there is no assurance that the investment objective of the scheme will be achieved.
Kalpen Parekh, MD & CEO, DSP Mutual Fund said, “The most underrated factor in investing is time. Once investors devote time, compounding follows. However, temporary price fluctuations distract most of us from staying invested. Hence, we want to offer a solution that reduces fluctuations by increasing the number of asset classes. Our multi-asset fund adds global stocks, precious metals, and bonds to Indian equities, thus, enabling investors to take advantage of cycles of each of these and eventually stay invested in the fund for longer due to lower fluctuations as against a single asset class.”
How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹100 per plan/option and in multiples of Re 1. There is no upper limit for investment.
Under normal circumstances, the asset allocation of the scheme will be as follows:
| Instruments | Indicative allocations ( per cent of total assets) | Risk Profile | |
Minimum | Maximum | ||
Equity & Equity related instruments including derivatives | 35% | 80% | Very High Risk |
Debt and money market instruments | 10% | 50% | Low Risk to Moderate Risk |
Gold ETFs & other Gold related instruments (including ETCDs) as permitted by SEBI from time to time | 10% | 50% | Moderate Risk to High Risk |
Other Commodity ETFs, Exchange Traded Commodity Derivatives (ETCDs) & any other mode of investment in commodities as permitted by SEBI from time to time | 0% | 20% | Moderate Risk to Very High Risk |
Units of REITs & InvITs | 0% | 10% | Very High Risk |
Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such multi-asset funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
Name of the fund | Five-year returns (in per cent ) |
| Quant Multi Asset Fund | 21.65% |
ICICI Prudential Multi-Asset Fund | 15.40% |
HDFC Multi-Asset Fund | 11.92% |
Axis Multi Asset Allocation Fund | 11.42% |
SBI Multi Asset Allocation Fund | 10.67% |
UTI Multi Asset Fund | 8.80% |
| Source: MoneyControl | |
How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against 40% NIFTY500 TRI + 20% NIFTY Composite Debt Index + 15% Domestic Price of Physical Gold (based on London Bullion Market Association (LBMA) gold daily spot fixing price) + 5% iCOMDEX Composite Index + 20% MSCI World Index.
Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” charged would also be “Nil”.
Who will manage this scheme?
Aparna Karnik and Prateek Nigudkar will be the fund managers for the equity investment of the scheme,Sandeep Yadav will be the fund manager for debt investment of the scheme,Jay Kothari will be the fund manager foroverseas investments of the scheme andRavi Gehani will be the dedicated fund manager for commodities investments of the scheme.
Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in theScheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
