DSP Mutual Fund launches DSP Multi Asset Allocation Fund. Five things to know
2 min read 07 Sep 2023, 12:19 PM ISTDSP Mutual Fund has launched the DSP Multi Asset Allocation Fund, which aims to offer long-term returns with resilience against market falls by diversifying investments across various asset classes
PremiumDSP Mutual Fund announced the launch of DSP Multi Asset Allocation Fund (DSP MAAF), an open-ended scheme that aims to offer investors long-term returns like what equities may offer but with added resilience against market falls. DSP MAAF aims to benefit investors by diversifying their investments between asset classes like domestic equities, international stocks, debt instruments, gold ETFs, other commodities, and ETF and exchange Traded Commodity Derivatives (ETCDs), aiming to reduce overall risk.
DSP MAAF will allocate assets based on 3 key but simple factors – long-term expected returns from different asset classes, their realized volatility, and the correlation among each asset class. The key idea is that when assets with low correlation among one another are added to a portfolio, even if one asset class faces a downturn, another one might perform well, potentially smoothening out the investor experience. Further, historical returns of a multi-asset model portfolio have shown returns similar to those from domestic equities with significantly lesser volatility than equities.
“The most underrated factor in investing is time. Once investors devote time, compounding follows. However, temporary price fluctuations distract most of us from staying invested. Hence, we want to offer a solution that reduces fluctuations by increasing the number of asset classes. Our multi-asset fund adds global stocks, precious metals & bonds to Indian equities, thus enabling investors to take advantage of cycles of each of these and eventually stay invested in the fund for longer due to lower fluctuations as against a single asset class," said Kalpen Parekh, MD & CEO, DSP Mutual Fund.
DSP Multi Asset Allocation Fund open today: Key things to know
1)The new fund offer (NFO) for DSP MAAF opened for subscription today, September 7th, 2023, and will close on September 21st, 2023.
2)DSP MAAF can invest between 35-80% in equities, of which up to 50% can be in international equities.
3)It can also invest 10-50% in debt, 10-50% in Gold ETF, 0-20% in other commodities through ETFs & ETCDs, and up to 10% in REITs & InvITs.
4)Long-term investors will also get the benefit of indexation when it comes to capital gains taxation, as applicable to debt schemes.
5) If investors consider a minimum three-year allocation to such a fund, then historical data indicates that after considering the benefit of indexation, debt or equity taxation does not cause a material difference in the net returns in the hands of the investor.
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
