WhiteOak Capital Mutual Fund on October 5, 2023 announced the launch of WhiteOak Capital Balanced Hybrid Fund, an open-ended balanced scheme that will invest in both equity and debt instruments.
The new fund offer (NFO) opened for subscription today and will close on October 19, 2023.
The scheme is benchmarked against Crisil Hybrid 50+50 Moderate Index. The minimum application amount is Rs. 500 and in multiples of Re. 1. For systematic investment plan, the minimum application amount is Rs 100 in weekly, fortnightly or monthly mode with a minimum of six instalments. For quarterly SIPs, the minimum application amount is Rs. 500 and a minimum of four instalments, WhiteOak Capital Mutual Fund said in the scheme information document.
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Investment Objective
WhiteOak Capital Mutual Fund announced in a press statement that the investment objective of the scheme is to provide long-term capital appreciation and generate income by investing in a balanced portfolio of equity and equity-related instruments, and debt and money market securities.
The fund will invest 40-60 per cent in equity and equity-related instruments (including foreign securities) and a similar proportion in debt securities (including securitised debt) and money market instruments, cash, and cash equivalents and /or units of domestic liquid mutual fund schemes across various sectors.
Under normal circumstances, the asset allocation philosophy of the scheme shall rebalance back to strategic asset allocation of 50 per cent, whenever external asset allocation limits (i.e. 40 per cent or 60 per cent) are breached due to market movement, it said. However, final portfolio can have higher or lower allocation depending on prevailing market scenario, it added.
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According to WhiteOak Capital Mutual Fund, the scheme provides three benefits – wealth creation, stability and tax efficiency.
“The scheme aims to achieve not only reasonable returns over time, but also reduce the intermittent volatility associated with pure equity allocation. The fund provides hassle-free and tax-efficient way of investing in debt and equity through a single mutual fund scheme, and is also eligible for long-term capital gains (LTCG) tax with indexation benefit, if held for more than three years,” WhiteOak Capital Mutual Fund said in a statement.
Aashish Somaiyaa, CEO, WhiteOak Capital Asset Management said, “Originally, balanced funds were supposed to be just ‘balanced’, but because of tax considerations, they took 65-80 per cent exposure in equity, thereby going “off balance”. Consequently, they had to be renamed as ‘aggressive hybrid funds’. But taxation should never be your prime consideration in determining what risk you take to drive returns. In any case, the current tax regime is not adverse if a fund is managed as a balanced hybrid fund by holding three years, rather than taking high equity to reduce tax impact, thus the ‘balance’ can be restored. This scheme will keep rebalancing allocation to 50:50 at periodic intervals to provide better balance vis-à-vis aggressive hybrid funds on a risk-adjusted basis.”
Prateek Pant, chief business officer, WhiteOak Capital Asset Management said, “Investors often make mistakes when they are exposed to extremes of market conditions or asset classes. They end up generating sub-optimal returns from investments because of huge intermittent volatility. One of the simple but effective strategies to follow is the ‘balanced approach’ of having growth asset (equity) and stability (debt) in the portfolio. With WhiteOak Capital Balanced Hybrid Fund, we intend to follow a simple approach to portfolio asset allocation that can help avoid exposing the portfolio to extreme volatility and, at the same time, can earn reasonable returns over time.”
