DSP Mutual Fund launches DSP Multi Asset Allocation Fund
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.
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DSP MAAF can invest between 35-80% in equities, of which up to 50% can be in international equities. It can also invest 10-50% in debt, 10-50% in Gold ETF, 0-20% in other commodities through ETFs & ETCDs and up to 10% in REITs & InvITs.
Long-term investors will also get the benefit of indexation when it
