HDFC Asset Allocator Fund of Funds NFO
HDFC Mutual Fund has announced the launch of the HDFC Asset Allocator Fund of Funds. The scheme would be predominantly investing its assets in equity, debt, and gold fund or ETF schemes.
The New Fund Offer (NFO) starts from 16th April 2021 and will end on 30th April 2021. The scheme will reopen for continuous sale and repurchase within 5 business days of allotment.
Investment Objective
The investment objective of the scheme is to generate long-term capital growth by investing and managing its assets in equity, debt, and gold funds or ETFs.
What are Asset Allocation funds and their benefits?
Asset allocation funds are those funds which invest or diversify their assets in different asset classes like debt, equity, or gold. The fund rebalances the portfolio as per the risk tolerance, time frame, and opportunities in the market.
Benefits:
- Each asset class acts differently in the different market or economic cycles.
- Investment in various asset classes reduces the risk of the portfolio and dependency to generate returns on a single asset class.
- It helps to mitigate the volatility of portfolio returns.
Features
- The fund will be investing a minimum of 40% of its assets in equity, , 10% in debt, and 10% in gold funds respectively.
- The fund offers exposure to 3 different asset classes.
- It will combine the negatively or low correlated assets to construct a portfolio.
- The fund will give a small exposure to the money market instruments.
Why Invest in HDFC Asset Allocator Fund of Funds NFO?
- The fund offers a good option to investors who want diversified asset allocation.
- The fund offers an active asset allocation through periodic rebalancing and reviews.
- The fund aims to provide better risk-adjusted returns.
- The fund will have debt taxation and therefore will offer indexation benefits on long term investments.
- The diversified portfolio can offer lower volatility in returns.
- To reduce the risk of the portfolio, the fund combines and invests in the negative or less correlated assets.
Who Should Invest?
This scheme is suitable for investors who are -
- Interested in long-term capital growth.
- Investors who want to invest in a well-diversified portfolio.
- Investors who are looking for a combined investment option which is investing in equity, debt, and gold.
- Recommended for investors with an investment horizon of 5 years & above.
Asset Allocation Pattern-
| Instruments | Minimum % of total assets (Indicative) | Maximum % of total assets (Indicative) | Risk Profile |
| Units of Equity oriented mutual funds | 40% | 80% | Low to High |
| Units of Debt oriented mutual funds | 10% | 50% | Low to Moderate |
| Units of Gold ETF schemes | 10% | 30% | Moderate to High |
| Debt and money market instruments | 0% | 5% | Low to Moderate |
About the Scheme-
| Name of the fund | HDFC Asset Allocator Fund of Funds |
| Fund launched by | HDFC Mutual Fund |
| Asset Management Company | HDFC Asset Management Company Limited |
| Type of scheme | An open-ended fund of funds scheme primarily investing its assets in equity, debt, and gold schemes. |
| Investment Objective | The investment objective of the scheme is to generate long-term capital appreciation by investing its assets in equity, debt, and gold funds or ETFs. |
| Benchmark | 90% NIFTY 50 Hybrid Composite Debt 65:35 TR Index + 10% Domestic Price of Gold(based on LBMA) |
| Entry Load | Not Applicable |
| Exit Load | -15% of units redeemed or switched out within 365 days - NIL -More than 15% of units redeemed or switched out within 365 days - 1% of applicable NAV -If units are redeemed or switched out after 365 days - NIL |
| Taxation | Taxed as Non-Equity -If units are sold within 3 years, gains will be added to income and taxed as per the investor's tax slab -If units are sold after 3 years, gains are taxed with long-term capital gain tax @20% after indexation benefits |
| Minimum Application Amount | ₹ 5,000 & in multiples of ₹ 1 thereafter |
| Minimum Additional Amount | ₹ 1,000 & in multiples of ₹ 1 thereafter |
| STP & SWP | Available |
| Plans Available |
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| Options |
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| Fund Managers | Mr. Amit Ganatra (For Equity), Mr. Anil Bamboli (For Debt), and Mr. Krishan Kumar Daga (For Gold ETFs) |
SIP Details
| Type | Minimum Installments | Minimum Amount |
| Daily SIP | - | ₹300 & in multiples of ₹1 thereafter |
| Weekly SIP | 6 | ₹1,000 & in multiples of ₹1 thereafter |
| Monthly SIP | 12 | Less than ₹1,000 |
| 6 | Greater than ₹1,000 | |
| Quarterly SIP | 12 | Less than ₹3,000 |
| 6 | Greater than ₹3,000 |