10 things to know about Bank of India Multi Asset Allocation Fund:
1. What is the investment objective of the scheme?
The investment objective of the scheme is to seek long-term capital growth by predominantly investing in equity and equity-related securities, debt and money market instruments and gold ETF.
2. For whom the scheme is suitable?
The scheme is suitable for investors who are seeking low volatility in their portfolio and exposure to multiple asset classes with better returns. Also, investors may consider this fund as part of their allotment of emergency or contingency plans, due to the diverse nature of the fund.3. Who will be the fund manager of the scheme?
The scheme will be managed by Alok Singh and Mithraem Bharucha.
4. Which benchmark will the scheme follow?
The scheme will be benchmarked against 37.50% of Nifty 500 TRI + 50% of Nifty Composite Debt Index + 12.50% of Domestic Prices of Gold.
5. What is the minimum application amount?
The minimum application amount is Rs 5,000 and in multiples of Re 1 thereafter. The minimum application amount for additional investment is Rs 1,000 and in multiples of Re 1 thereafter. The minimum application amount for monthly SIP/STP is Rs 1,000 and in multiples of Rs 100 thereafter for a minimum of six months.
6. What is the exit load?
The exit load for redemption/switch out up to 10% of the initial units allotted, within 12 months from the date of allotment is “Nil”. Any redemption/switch out in excess of the above-mentioned limit would be subject to an exit load of 1% if the units are redeemed/switched out within 12 months from the date of allotment of units. If the units are redeemed/switched out after 12 months from the date of allotment of units is “Nil”.
7. What is the expense ratio?
The maximum total expense ratio (TER) permissible under Regulation 52 (6) (c) (i) and (6) (a) is up to 2%. The additional expenses under regulation 52 (6A) ( c) are up to 0.05%. The additional expenses for gross new inflows from specified cities under Regulation 52 (6A) (b) are up to 0.30%.
8. How will the scheme allocate its assets?
The scheme will invest 35-40% in equity and equity-related instruments, 45-55% in debt and money market instruments, 10-15% in Gold ETF, and 0-10% in units issued by REITs and INVITs.
“The low correlation between debt and equity allows the portfolio to balance the volatility associated with the individual asset class. The exposure to gold further helps in managing the portfolio volatility. The low volatility of the portfolio increases the propensity of investors to hold on to their investments for long periods, which in turn results in better accretion because of the compounding effect,” said Alok Singh, CIO, Bank of India Investment Managers.
9. What is the investment strategy?
The scheme will build a portfolio using a combination of top-down and bottom-up approaches. For asset allocation, the fund manager would take the help of the qualitative framework of MVPS (Macro, Valuation, Policy and Sentiment).
10. Why multi-asset allocation fund now?
“The AMC has exhibited competence in the construct and management of asset allocation and rules-based hybrid products. The Multi Asset Allocation Fund is a further addition to this bouquet for the benefit of our existing and potential investors, who are looking at a portfolio mix that predominantly focuses on stability through majority debt allocation while growth & inflation hedges are achieved vide secondary allocations in equity & gold. Further investors also have an added benefit of indexation on Long-term capital gains (after a suitable holding period of over 3 years as per current tax regulations),” said Mohit Bhatia, CEO, Bank of India Investment Managers.
