· NFO to close on Sep 1st 2023
· Open-ended scheme investing in equity, debt and money market securities, and gold/silver ETFs
· Fund is tax efficient, aims to generate risk-adjusted returns and hedges against inflation
New Delhi- Shriram Asset Management Company, part of the Shriram Group, will launch the Shriram Multi Asset Allocation Fund on 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.
Between 65% to 80% of the fund’s corpus will be invested in equity, which includes 30 to 40 stocks from Shriram AMC’s proprietary Enhanced Quantamental Investment (EQI) model. The model relies on statistical data to make the right investment decisions for better fund performance while integrating quant as well as fundamental inputs for portfolio construction. The minimum allocation of 65% to equities allows investors in this fund to benefit from Long Term Capital Gains tax of 10%. The fund would also allocate 10% to 25% of funds in high quality (AAA) Short to Medium term debt, preferably in government and government-backed securities to avoid any credit risk; 10% to 25% in gold/silver ETFs, with the option up to 10% in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).
Investors can regularly invest in this fund through Systematic Investment Plans (SIP), top-ups or Systematic Transfer Plans (STP) from liquid or overnight funds to meet their financial and family goals. The minimum investment amount for lumpsum is ₹5,000 while for SIPs it is ₹1,000 per month or ₹3,000 per quarter. There is no lock-in period involved.
The fund offers the investor the benefit of Long Term Capital Gains tax (LTCG) @10% (plus surcharge and cess) if they cross ₹1 lakh of capital gains in a fiscal year. If an investor buys/sells equity, debt, gold separately to rebalance their asset allocation, they might face capital gains tax with each transaction. When the fund manager transacts within the scheme, there is no capital gains tax on the scheme. These two aspects make this fund a tax efficient investment option for investors.
Kartik L Jain, MD & CEO, Shriram Asset Management Company said, “Analysis of the last five years indicates that the category of Multi Asset Allocation Funds has shown lesser volatility with equity-like returns; hence this is a good option for goal planning. The exposure to gold also gives us a hedge against market volatility especially during crisis periods and hence reduces the drawdown (fall from the peak) and gives a quicker recovery back to the earlier level.”
“The Shriram Multi Asset Allocation Fund has a two-tier approach to delivering superior risk adjusted returns. Firstly, its ‘risk parity’ approach between equity/debt/gold aims to minimise volatility and maximise returns, thereby giving better returns to the investor. Secondly, for the equity allocation, our proprietary Enhanced Quantamental Investment (EQI) model uses an integrated combination of quant and fundamental analysis to create a risk adjusted equity portfolio that aims to deliver consistent alpha (returns above the benchmark). We use three factors: low volatility (steady returns), momentum (increasing returns) and low valuation (at the right price) which has shown very positive results in both back testing as well as forward testing. We believe this one fund will appeal well to our investors,” he added.
Shriram Group has re-energized its mutual fund business last year bringing in US-based Mission1 Investments LLC as its strategic partner. With this, Shriram AMC has diversified its product portfolio, bringing relevant and differentiated investment solutions to its customers. The AMC is focusing on ‘Performance, Products and Placement’ to set the foundation for sustainable growth.