Asset allocation Financial News

DSP Mutual Fund announced the launch of DSP Multi Asset Allocation Fund (DSP MAAF), an open-ended scheme that aims to offer investors long-term returns like what equities may offer but with added resilience against market falls. DSP MAAF aims to benefit investors by diversifying their investments between asset classes like domestic equities, international stocks, debt instruments, gold ETFs, other commodities and ETF & Exchange Traded Commodity Derivatives (ETCDs), aiming to reduce overall risk, a press release said. Historical data has repeatedly shown that the best-performing asset class can vary significantly over the years, making it difficult to predict the winner each year. Hence one’s best bet is to invest across asset classes. DSP MAAF will allocate assets based on 3 key but simple factors – long-term expected returns from different asset classes, their realized volatility and the correlation among each asset class. The key idea is that when assets with low correlation among one another are added into a portfolio, even if one asset class faces a downturn, another one might perform well, potentially smoothening out the investor experience. Further, historical returns of a multi asset model portfolio have shown returns similar to those from domestic equities with significantly lesser volatility than equities.

equity funds. “If you want to limit the risk associated with equity markets, investing in ULIPs could be considered," said Agarwal “As you enter your forties, you may begin to rebalance your portfolio to incorporate a somewhat greater proportion of more stable investments, such as bonds. While equities can still play a substantial role, the portfolio should become more balanced as retirement approaches to limit possible volatility," said Gupta.

Crisil Dynamic Asset Allocation Index (45% Equity, 45% Debt, and 10% Liquid). The asset allocation (between debt and equity) of the fund will be more dynamic/active in nature. It is based on an in-house quantitative model with limited qualitative input from the fund manager and aims to optimize risk return.

Kotak Mutual Fund has launched Kotak Multi Asset Allocation Fund, an open-ended scheme investing in equity, debt and money market instruments, commodity ETFs and exchange traded commodity derivatives. The new fund offer or NFO of the scheme is open for subscription, and it will close on September 24. The investment objective of the scheme is to generate long term capital appreciation by investing in equity and equity-related securities, debt and money market instruments, commodity ETFs and exchange traded commodity derivatives.

Aashish Somaiyaa, CEO, White Oak Capital Management, points out that “bulk of whatever net flow is there, a good part of it is going into smallcaps. Those are the signs which tell us that there is some amount of froth in valuation. Some exuberance also points to that and in the last three-four months, suddenly the smallcap and micro cap index have shot up a lot. So, sharp movement in a short time that actually tells you a lot.”You must have read the latest note by Akash Prakash, which is based on your previous boss Raamdeo Agrawal’s recent presentation on flows. Raamdeo has made a presentation to a clutch of investors which is the talk of the town on how meaningful and sustainable domestic flows has the potential to become over the next decade or so. Are you seeing signs that now it is not about retail investors trying to time the market and gradually cyclicality is moving out of it? Yes, I definitely read that interesting piece by Mr Akash Prakash.

Nirav Karkera, Head of Research, Fisdom, says if you have less than five years to retire, you should definitely build a corpus utilising slightly equity-oriented products but not very heavily equity-oriented and even within equity, do not go towards the farther end of the markets that are midcaps or smallcaps; stick to less volatile largecaps and blue chips.”If somebody is already a senior citizen, what should they keep in mind while putting fresh money into different asset classes that are available? Also, what are the key points they need to be noting given the requirements in times ahead?For a senior citizen, life is not very different from any other investor irrespective of whether a senior citizen or not and the basics apply to them as well. So, the number one point that most people do not really recognise is that investing decisions do not start with finding the right product or the most exciting investment opportunity, but with assessing your own self, your own financial condition, your risk profile, your objectives and your appetite for volatility or risk.

Asset Management Company, part of the Shriram Group, launched the Shriram Multi Asset Allocation Fund today, August 18th, 2023. This new fund aims to offer long-term inflation-adjusted wealth creation through exposure to multiple assets such as equity, debt, and gold/silver ETFs. The New Fund Offer (NFO) will close on September 1st, 2023.

Shriram Asset Management Company would launch its latest Shriram Asset Allocation Fund on August 18, a top official said here on Thursday. The company, part of the diversified conglomerate Shriram Group, expects to offer long term 'inflation-adjusted wealth creation' through exposure to multiple assets including equity, debt, gold Exchange Traded Funds (ETFs).

Given the age profile of Indians and the low exposure to equities in their savings pool, this trend is likely to continue in the future. The pandemic did not dampen this appetite and since January of this year, the inflows into mutual funds continued at a good pace, with small-cap funds receiving record inflows while the large-cap had a mild outflow (See table below). Smallcap funds must invest at least 65% in smallcap companies; defined as those companies which are ranked 251 and beyond by market cap.

Maneesh Dangi, Founder, Macro Mosaic, says “investors should look to increase surface area, all sorts of investors. Those who are already fully invested in Indian equities and are anxious as to why prices are not going up, we should guide them to add at least two more assets – Indian bonds and US equities. ”Dangi also says that since “the markets are intrinsically cyclical, no story including that of India's is secular.

By Rina Nathani

By Dhaval KapadiaI had redeemed some units from my mutual fund SIP a year ago as I wanted money for an emergency. Now I have got a bonus. Should I invest the amount in a lump sum in the same fund or increase the SIP amount?—Alok Chabbra For deploying the additional corpus, you should evaluate your portfolio from an asset-allocation point of view and build exposure in line with your recom-mended asset allocation.

Money management starts with taking care of household budgeting and goes a distance in having a financial plan in place for your long term goals. No matter what your income is, what matters is how much you are able to save as a percentage of your income.

By Joydeep Sen