Nippon India Mutual Fund has launched Nippon India Asset Allocator FoF (Fund of Fund). The new fund offer has opened on January 18 and will close for subscription at offer price of Rs 10 on February 1 i.e. next month. We discuss the actively managed passive investment option. Read on.Â
Nippon India Asset Allocator FoF is an open ended fund of funds scheme investing in equity oriented schemes, debt oriented schemes and gold ETF of Nippon India Mutual Fund. So, please understand that the fund will invest in schemes of Nippon MF mainly.
Why asset allocation
History is replete with examples on how the performance of various asset classes and even sub asset classes keep changing over time.
Even the best of minds cannot always predict which asset class will do well.
In this backdrop, Nippon India Asset Allocator FoF is a solution. The scheme will invest across Equity oriented schemes, Debt oriented schemes and Gold ETF of Nippon India Mutual Fund with the help of an in-house proprietary model. This model decides allocation across Large Cap, Mid Cap, Small Cap, Short Term Debt, Long Term Debt and Gold ETF.
Markets change, need for dynamism
Markets are volatile. They go through ups and downs.Â
The Nippon dynamic framework uses a robust set of Macro, Micro & Market Indicators with an aim to deliver superior risk adjusted returns.
This ensures that you are always invested in the asset classes where the growth is most likely to be. Also, you are exposed to others to diversify risks.Â
Nippon India Asset Allocator FoF will go as per an asset allocation framework. It can invest minimum zero per cent in equity schemes and can invest maximum 100 per cent in equity schemes. This is same for debt schemes. For gold ETFs, minimum is zero per cent but maximum is 25 per cent. Money market instruments and liquid schemes exposure range will be 0 to 5 per cent.Â
Other scheme details
Nippon India Asset Allocator FoF scheme offers direct and regular plans. It will have Growth Plan and Dividend Plan (Dividend Payout Option and Dividend Reinvestment Option).
Direct Plan is only for investors who purchase /subscribe Units in the scheme directly with the fund (i.e. investments not routed through anÂ AMFI Registration Number (ARN) Holder).
Distribution of dividends will be subject to the availability of distributable surplus.
The scheme shall re-open for ongoing subscription and redemption on or before 15th February 2021.
The Minimum Application for NFO is Rs 5,000.
Minimum additional purchase amount is Rs 1,000.Â The scheme’s Benchmark Index is CRISIL Hybrid 50 + 50 â€“ Moderate Index.
Name of the Fund Manager -Â Prashant Pimple (Senior Fund Manager), Ashutosh Bhargava (Co-Fund Manager).Â
Exit load – 10% of the units allotted shall be redeemed without any exit load, on or before completion of 12 months from the date of allotment of units.Â
Any redemption in excess of such limit in the first 12 months from the date of allotment shall be subject to the following exit load.Â
Redemption of units would be done on First in First out Basis (FIFO): Exit load 1% if redeemed or switched out on or before completion of 12 months from the date of allotment of units.â€¢ Nil, thereafter