PGIM India Mutual Fund has launched ‘PGIM India Balanced Advantage Fund’, a scheme which aims to provide capital appreciation and income distribution to the investors by dynamically managing the asset allocation between equity and fixed income using equity derivatives strategies, arbitrage opportunities and pure equity investments.
The NFO will open for subscription on January 15, 2021 and will close on January 29, 2021. The Benchmark Index of the fund is CRISIL Hybrid 50+50 Moderate Index. The scheme. The scheme seeks to reduce the volatility by diversifying the assets across equity and fixed income. The Fund will be managed by Aniruddha Naha (for equity investments), Kumaresh Ramakrishnan (for debt and money market investments) and Anandha Padmanabhan (for overseas investments).
“The Balanced Advantage Fund category is an excellent investment solution for investors. A model based approach helps in automatically rebalancing investments between equity and fixed income in a tax efficient manner without the investor having to keep track herself. The dynamic asset allocation model that the PGIM India Balanced Advantage Fund will follow considers 15 years rolling PE average as the long-term average PE in order to capture changing trends in the equity markets.
As markets mature over periods of time, we believe that this feature will keep the model always relevant. This fund is suitable for investors with moderately high-risk appetite. The fund has the potential to deliver consistent long-term risk-adjusted returns & smooth investing experience by dynamically allocating money between equity and fixed income instruments” says Ajit Menon – CEO, PGIM India Mutual Fund.
The minimum initial investment in the scheme is ?5,000 and in multiples of Re1 thereafter. The additional application amount is ?1,000 and in multiples of Re. 1/- thereafter. The scheme will follow a tax efficient dynamic asset allocation model as fund is categorized as equity oriented scheme. 65% minimum allocation to equity would be a mix of directional equity and arbitrage.
The portfolio construction process, similar to our existing equity funds, will focus on quality with three filters for inclusion in the investment universe – First: operating cash flow positive for 7 out of 10 years, second: demonstrated corporate governance and third: debt to equity ratio < 3.