Nippon India Multi Asset Fund: What’s Special About Nippon’s Latest NFO ?


Nippon India Multi Asset Fund


 

Finally after 10 years, a rare special opportunity knocks your door. Nippon India Mutual Fund (Earlier Reliance Mutual Fund) has introduced a New Fund Offer (NFO) launching on 7th August 2020. To say the least,the situation is quite unique since Nippon is known for being extra picky about NFOs. 

The New Fund Offer (NFO) is called the “Nippon India Multi Asset Fund” will be open for subscription from 7th August to 21st August 2020. The fund is a multi asset fund which is a special category of hybrid funds. Multi asset funds will invest at least 10% in 3 different types of fund classes.They offer diversity to the portfolio of an individual while keeping in check the rate of risks and returns.

Recently, Multi Asset funds have become highly popular. Just a few days back, Motilal Oswal Fund House also launched a Multi Asset Fund NFO. This rise in popularity can be attributed to the risky nature of current markets. 

These funds are a safe option for investors since they offer steady income by distributing the risk involved by investing in both low risk and high risk asset classes. Asset allocation plays a huge role in the overall performance of your portfolio. Multi asset funds play a safe game by taking full advantage of asset allocation. Here’s a bit about asset allocation:

What is Asset Allocation?

Asset allocation is an investment strategy that aims to balance risk and reward by distributing a portfolio’s assets based on the investor’s financial goals, risk taking capacity, and investment horizon. You can invest in multiple asset classes like equity, debt, cash, gold etc. Here’s how asset allocation helps:

What are the benefits of Asset Allocation?

  • Reduced Volatility: Asset classes follow different cycles over different time periods. When you invest in multiple asset classes, chances are that when one performs poorly, another class performs well making up for the loss resulting in reduced volatility.
  • Risk Adjusted Returns: Asset Allocation gives investors optimal returns by balancing out the performances of various asset classes involved.
  • Long Term Investing: Asset allocation is done to control your portfolio over the longer term. It should not change based on market fluctuations. Your asset allocation might change over the longer term based on your age, your financial goals or financial situation.

After exploring the advantages of Asset Allocation, check out how the Nippon India Multi Asset Fund will be a great option for investment to an investor:

Nippon India Multi Asset Fund

Nippon India Multi Asset Fund is an open ended fund scheme that will invest in multiple asset classes including Equity, Overseas Equities, Exchange Traded Commodity Derivatives, Gold ETF and finally Debt & Money Market instruments. 

What Are The Features Of Nippon India Multi Asset Fund?

  1. Fund Type: It is an open ended fund scheme.

  2. Minimum Amount: Investment starts at Rs 5,000 and in multiples of Re. 1 thereafter.Fund Objective: The primary investment objective of the fund is to seek long term capital growth by investing in equity and equity related securities, debt & money market instruments and Exchange Traded Commodity Derivatives and Gold ETF as permitted by SEBI from time to time.

  3. Asset Allocation: Current estimate is investment will be 50% in equity, 20% in overseas equities, 15% in debt & money market instruments and 15% in commodities.

  4. Entry Load: No entry load will be charged

  5. Exit Load: 1% if redeemed or switched out on or before completion of 1 year from the date of allotment of units and no exit load after that.

  6. Fund Manager: Every asset class will have a different Fund Manager from Nippon India Mutual Fund (NIMF)

    a) Mr. Manish Gunwani – Equity Investment Chief Investment Officer, NIMF
    b) Mr. Ashutosh Bhargava – Fund Manager & Head of Equity Research, NIMF’
    c) Ms. Kinjal Desai – Fund Manager of Overseas, NIMF
    d) Mr. Amit Tripathi – Fixed Income Chief Investment Officer, NIMF
    e) Mr. Vikram Dhawan – Head of Commodities,NIMF

What is the role of the Fund Manager in Nippon India Multi Asset Fund?

A fund manager will take care of the asset rebalancing on a quarterly basis to adjust for any deviation in asset allocation due to any big change in the market situation.

Why should you invest in Nippon India Multi Asset Fund?

Here’s why Nippon India Multi Asset Fund is a great option to invest now:

1. Lower Volatility: During these difficult market times, the volatility offered by individual asset classes.like Equity, Debt, International Equities, Commodities gets balanced out in case of Multi Asset Funds. They are a safe option.

2. Superior Returns: Investing in multiple assets allows you to have better risk adjusted returns as compared to investing in individual asset classes. Superior risk adjusted returns offer steady income.

3. Tax Efficiency:  Since the fund managers will be taking care of the automatic rebalancing within the fund, the investor will benefit wrt. tax efficiency. That’s because he/she won’t be buying/selling any securities that could result in capital gains tax imposition.

As per Manish Gunwani, the Chief Investment Officer of Equities, “Investors tend to have a home-bias and invest mainly in domestic equities. We believe it is important for investors to have a foot in every major investable asset classes, including international equities and commodities, which could help them balance returns across cycles” 

If you are a risk averse investor looking for steady income then this is the perfect fund for you. Grab this rare offer with both hands and invest in Nippon India MF today with Sqrrl!

Written by

Priyanshi Bhardwaj