DSP Mutual Fund has unveiled the DSP Multi Asset Allocation Fund (DSP MAAF), an open-ended scheme designed to diversify investments across various asset classes, including domestic and international equities, debt instruments, gold ETFs, other commodities, ETFs, and Exchange Traded Commodity Derivatives (ETCDs). The primary objective of the fund is to mitigate overall risk within investors’ portfolios.
The New Fund Offer (NFO) for DSP MAAF is scheduled to run from September 7 to September 21, 2023.
Investors are urged to recognize the importance of time in investing, with compounding being a key factor in wealth creation. DSP aims to provide a solution that reduces market fluctuations by increasing the inclusion of different asset classes. By incorporating global stocks, precious metals, bonds, and Indian equities, investors can take advantage of the cycles of each asset class, enabling them to remain invested for longer periods due to reduced volatility. Historical data has demonstrated that the best-performing asset class can vary significantly each year, making it challenging to predict a consistent winner.
Key Features of DSP MAAF:
Can invest between 35-80% in equities, with a potential allocation of up to 50% in international equities.
Allows for investments between 10-50% in debt, 10-50% in Gold ETF, 0-20% in other commodities via ETFs & ETCDs, and up to 10% in REITs & InvITs.
Does not provide equity taxation benefits.
Minimum investment of ₹100 per plan/option with no upper limit.
Long-term investors may benefit from indexation for capital gains taxation, similar to Debt schemes.
DSP MAAF’s asset allocation strategy relies on three primary factors: long-term expected returns from various asset classes, their realized volatility, and the correlation among asset classes. This approach aims to create portfolios with low correlation among assets, so even if one asset class faces a downturn, another may perform well, potentially smoothing out the investor experience. Historical returns from a multi-asset model portfolio have shown performance akin to domestic equities but with significantly lower volatility.
The scheme’s performance will be benchmarked against the following indices: 40% NIFTY500 TRI + 20% NIFTY Composite Debt Index + 15% Domestic Price of Physical Gold (based on London Bullion Market Association (LBMA) gold daily spot fixing price) + 5% iCOMDEX Composite Index + 20% MSCI World Index.
DSP MAAF’s New Fund Offer opened for subscription on September 7, 2023, and will close on September 21, 2023.
According to Kalpen Parekh, Managing Director of DSP Mutual Fund, equity is the only asset capable of outperforming inflation. Instead of attempting to time market entry points, investors should safeguard their interests by diversifying across various asset classes.
DSP MAAF involves no “Entry Load,” meaning investors do not incur any charges for investing in this scheme. Furthermore, the “Exit Load” is also set at “Nil.”
The fund managers for DSP MAAF are as follows:
Equity Investment: Aparna Karnik and Prateek Nigudkar
Debt Investment: Sandeep Yadav
Overseas Investments: Jay Kothari
Commodities Investments: Ravi Gehani
