White Oak Asset Management Company (AMC) has announced the launch of the White Oak Capital Multi Asset Allocation Fund. The new fund offer (NFO) will open on May 3, 2023 and remain open for seven days.
The new fund offer of White Oak Capital Multi Asset Allocation Fund will open on May 3, 2023. The minimum investment will be Rs 500. Here’s decoding what is a multi-asset allocation fund.
White Oak Asset Management Company (AMC) has announced the launch of the White Oak Capital Multi Asset Allocation Fund. The new fund offer (NFO) will open on May 3, 2023 and remain open for seven days.
The minimum application amount is Rs. 500 and in multiples of Rs. 1 thereafter. As it is an open-ended scheme, it will reopen again for buying later.
The systematic investment plan (SIP) amount is Rs. 500 on weekly, fortnightly or monthly basis. Where one opts for a quarterly mode of SIP payment, the amount is Rs. 1,500 and in multiples of Re. 1 thereafter.
The benchmark indices to which the returns will be compared include S&P BSE 500 TRI, CRISIL Composite Bond Fund Index and domestic prices of gold and silver.
White Oak AMC has classified the investment in the fund in the high risk category. It has said it is a suitable investment opportunity for any investors seeking long-term capital appreciation and investment across multiplied asset class.
Multi Asset Allocation Fund
Typically investors try not to keep all their investments in one basket. Multi asset allocation mutual funds allocate investments from depositors across different asset classes. These funds are meant to invest at least 10 per cent in at least any of three different categories, such as equity, debt, gold or commodities as well as real estate investment trusts (REITs).
Multi asset allocation funds also have the flexibility to tap into an asset category when there is a bull run, as well as protect assets by investing in less volatile assets during market headwinds.
White Oak Multi Asset Fund
The government removed the long-term capital asset benefit given to debt mutual fund categories effective April 1, 2023. Also, an equity mutual fund scheme must invest at least 65 per cent of the scheme’s assets in equities and equity related instruments. So investors are seeking to harbour tax benefits from equity mutual funds.
Says Aashish P Somaiyaa, chief executive officer, White Oak Capital Management, “Typically multi asset allocation funds portray taxation benefit as the major advantage. All of them have equity-oriented asset allocation. But they are required to keep 10 per cent in three asset classes to be multi asset funds in true sense”.
“To get taxation benefits, if you increase equity allocation, you risk increased volatility. A proper asset allocation mix can keep the volatility in check. Our multi asset fund will invest in Indian equity, foreign equity, debt and gold,” he said.
According to Somaiyaa, the fund plans to keep the equity component in a large cap-biased flexi cap approach with 70 per cent large-cap allocation. The fund will also invest in stocks of S&P 500 based on relative attractiveness to domestic equity.
Somaiyaa added that the fund has allowed a higher band to gold allocation, i.e., between 10 and 40.
“Gold is a strong anti-equity asset class that helps you in periods of extreme adversity against equity. White Oak Multi Asset Fund will invest in gold also after considering relative strength of dollar,” he said, adding that the stress on gold is because of current economic conditions.
Gold outperforms in times of economic slowdown when there is high inflation and real estate prices fall. During recovery the equities outperform other asset classes, Somaiyaa added.