Bandhan Nifty Next 50 Index Fund - Direct (G) : NFO Details
LIC MF Multi Asset Allocation Fund - Direct (G): NFO Details


Last Updated: 20th January 2025 - 05:38 pm
LIC MF Multi Asset Allocation Fund - Direct (G) is an open-ended scheme introduced by LIC Mutual Fund, aiming to generate long-term capital appreciation through a diversified portfolio comprising equity and equity-related instruments, debt and money market instruments, and units of Gold Exchange Traded Funds (ETFs).
Details of the NFO: LIC MF Multi Asset Allocation Fund - Direct (G)
NFO Details | Description |
Fund Name | LIC MF Multi Asset Allocation Fund - Direct (G) |
Fund Type | Open Ended |
Category | Multi Asset Allocation |
NFO Open Date | 24-January-2024 |
NFO End Date | 07-February-2024 |
Minimum Investment Amt | ₹5,000/- and in multiples of ₹1 thereafter |
Entry Load | -Nil- |
Exit Load |
If units of the Scheme are redeemed / switched-out within 3 months from the date of allotment: a. Up to 12% of the units: No exit load will be levied. b. Above 12% of the units: exit load of 1% will be levied. If units of the Scheme are redeemed / switched-out after 3 months from the date of allotment: No exit load will be levied. |
Fund Manager | Mr. Nikhil Rungta, Mr. Sumit Bhatnagar, Mr. Pratik Harish |
Benchmark | 65% Nifty 500 TRI + 25% Nifty Composite Debt Index + 10% Price of Domestic Gold |
Investment Objective and Strategy
Objective:
The investment objective of the Scheme is to generate long term capital appreciation by investing in diversified portfolio of equity & equity related instruments, debt & money market instruments and units of Gold Exchange Traded Funds (ETFs).
There is no assurance that the investment objective of the Scheme will be achieved.
Investment Strategy:
The LIC MF Multi Asset Allocation Fund - Direct (G) employs a diversified investment strategy across three primary asset classes:
- Equity Investments: The fund allocates 65% to 80% of its assets to equity and equity related instruments, investing across large-cap, mid-cap, and small-cap stocks. The equity strategy combines top-down and bottom-up approaches to identify growth opportunities.
- Debt and Money Market Instruments: Allocating 10% to 25% of assets, the fund invests in high-quality fixed-income instruments. This component focuses on balancing duration and credit risk to optimize returns in varying interest rate environments.
- Gold ETFs: The fund dedicates 10% to 25% of its assets to units of Gold Exchange Traded Funds, providing exposure to gold as a commodity. This allocation aims to offer a hedge against inflation and currency fluctuations.
The fund manager retains the discretion to adjust allocations based on prevailing market conditions, employing a tactical asset allocation approach to optimize returns. Additionally, hedging and arbitrage strategies may be utilized to mitigate risk and manage exposure.
This multi-asset strategy aims to generate long-term capital appreciation while managing risk through diversification.
Why Invest in LIC MF Multi Asset Allocation Fund - Direct (G)?
Investing in the LIC MF Multi Asset Allocation Fund - Direct (G) offers several advantages for investors seeking diversified exposure across multiple asset classes:
- Diversified Portfolio: The fund strategically allocates investments across equity, debt, and gold assets, aiming to balance growth potential with risk mitigation.
- Professional Fund Management: Managed by experienced professionals, the fund leverages in-depth market analysis and research to make informed investment decisions, adapting to changing market conditions.
- Cost Efficiency: Opting for the Direct Plan allows investors to benefit from a lower expense ratio compared to Regular Plans, as it eliminates distributor commissions, potentially enhancing net returns over time.
- Systematic Investment Options: The fund offers flexibility with Systematic Investment Plans (SIPs), enabling investors to start with amounts as low as ₹100 per day, promoting disciplined and regular investing.
- Liquidity with Defined Exit Load: Investors can redeem or switch out up to 12% of their units without any exit load within three months from the date of allotment, providing liquidity while encouraging longer-term investment.
By investing in this fund, individuals can pursue long-term capital appreciation through a well-diversified and professionally managed portfolio, tailored to navigate varying market conditions.
Strength and Risks – LIC MF Multi Asset Allocation Fund - Direct (G)
Strengths:
As a new fund offering (NFO), it doesn't have a performance history. However, several features highlight its potential strengths:
- Diversified Investment Strategy: The fund aims to generate long-term capital appreciation by investing in a diversified portfolio comprising equity and equity-related instruments, debt and money market instruments, and units of Gold Exchange Traded Funds (ETFs). This multi-asset approach can help mitigate risks associated with a single asset class.
- Systematic Investment Plan (SIP) Options: The fund offers flexible SIP options, allowing investors to start with amounts as low as ₹100 daily, ₹200 monthly, or ₹1,000 quarterly. This flexibility enables investors to build their investment portfolios systematically over time.
- Benchmark Alignment: The fund's performance will be benchmarked against a composite index: 65% Nifty 500 TRI, 25% Nifty Composite Debt Index, and 10% Domestic Price of Gold. This benchmark composition reflects the fund's diversified investment strategy and provides a standard for evaluating its performance.
- While these features suggest potential strengths, it's essential to note that, as a new fund, there is no historical performance data available. Prospective investors should consider their risk tolerance, investment goals, and consult with a financial advisor before investing.
Risks:
The LIC MF Multi Asset Allocation Fund - Direct (G) carries several risks that investors should consider before investing. Being a multi-asset fund, it is exposed to market fluctuations across equities, debt instruments, and gold ETFs. The equity portion is subject to stock market volatility influenced by macroeconomic conditions, sectoral trends, and company-specific factors. The debt component is affected by interest rate movements, where rising interest rates can lead to lower bond prices, resulting in potential losses. Additionally, credit risk exists if the fund holds corporate bonds or fixed-income securities where issuers may default on payments.
Liquidity risk is another concern, as certain segments of debt and gold ETFs may be difficult to sell during adverse market conditions, leading to delays in redemptions or lower realized values. The fund’s returns are also dependent on asset allocation strategies by the fund manager. If the portfolio allocation favors an underperforming asset class, the overall returns may be negatively impacted. Concentration risk is another factor to consider, as a high exposure to a particular sector or asset class could reduce diversification benefits and increase volatility.
As a newly launched fund, the LIC MF Multi Asset Allocation Fund lacks historical performance data, making it difficult to evaluate past risk-adjusted returns or the fund manager’s effectiveness in managing multi-asset allocations. Investors should also be mindful of inflation risk, where returns may not consistently outpace rising costs, affecting real purchasing power. Regulatory changes in mutual fund taxation or SEBI policies could also impact post-tax returns.
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