PPFAS Mutual Fund, launched its latest offering (NFO), the Parag Parikh Dynamic Asset Allocation Fund, as its sixth scheme to the fund house's portfolio. The New Fund Offer (NFO) will run from February 20 to February 22, 2024.
The Parag Parikh Dynamic Asset Allocation aims to invest in equity, equity derivatives, and fixed-income instruments claiming to allocate more to debt instruments than its peers. The allocation between equity instruments and fixed income will be managed dynamically to provide investors with long-term capital appreciation while managing downside risk.
The minimum investment in the scheme shall be Rs 5,000 and in multiples of Rs 1 thereafter. The scheme will reopen on February 28, 2024. No exit load will be levied for the 10 per cent of units from the date of allotment, however, a 1 per cent load will be applicable if redeemed within one year of the date of allotment for the beyond 10 per cent of the units. No exit load will be levied if redemption is made after 1 year from the date of allotment of units.
Benchmarked against the CRISIL Hybrid 50+50 Moderate Index, the fund provides a relatively tax-friendly option to investors also leveraging the indexation benefit and is meant for their debt allocation, Neil Parag Parikh, Chairman and CEO of PPFAS Asset Management Private Limited said.
Balanced Advantage Funds, such as the Parag Parikh Dynamic Asset Allocation Fund is a hybrid fund investing in both equities and debt. This strategy allows investors to benefit from equity growth while having the security of debt holdings during market downturns. These funds are well-suited for medium-term investment goals, offering a blend of safety, income, and modest capital appreciation, the Amfi website says.
Defined by Sebi as funds allowing flexible allocation between equity and debt, Dynamic Asset Allocation Funds offer investors the flexibility to adjust their exposure based on prevailing market conditions. allows flexible allocation between equity (0 per cent to 100 per cent) and debt (0 per cent to 100 per cent), and most of the schemes in the Balanced Advantage Fund or Dynamic Asset Allocation Fund category are equity-oriented. Parikh Dynamic Asset Allocation Fund claims it will maintain the equity allocation between 35 per cent and 65 per cent to avail indexation benefits.
We will retain the flexibility to invest in the entire range of debt securities - Sovereign, State Government, PSU and corporate securities across all maturities - (including securitised debt) and money market instruments. In terms of equity investments, strong cash flow stocks are preferred (greater dividend payout/buybacks) and also stocks with a “margin of safety," the fund house said.
Data from the Association of Mutual Funds in India (AMFI) shows 28 funds in this category with an average one-year return of 23.21 per cent, three-year return of 12.6 per cent, and five-year return of 13.5 per cent.
