Morgan Stanley Multi Asset Fund
The fund combines the benefits of income and diversification through asset allocation
Summary
| Type |
Open-ended Debt scheme |
Benchmark Index |
Plan A
80% CRISIL Composite Bond Fund Index and 20% S&P CNX Nifty
Plan B
70% CRISIL Composite Bond Fund Index; 15% S&P CNX Nifty and 15% Price of Gold |
Min. Investment:
SIP: |
Rs 5,000 (Non-SIP Purchase) and Rs 1,000 (SIP Purchase) |
Face Value |
Rs 10 per unit |
| Entry Load |
Nil |
Exit Load * |
1.0%* |
| Issue Opens |
January 17, 2012 |
Issue Closes |
January 31, 2012 |
* An exit load of 1.0% will be charged if redeemed within 1 year from the date of allotment of units.
Investment Objective*
Plan A
The Scheme seeks to “generate regular income through investments in debt & money market instruments, along with capital appreciation through limited exposure to equity and equity related instruments”.
Plan B
The Scheme seeks to “generate regular income through investments in debt & money market instruments, along with capital appreciation through limited exposure to equity and equity related instruments and provide diversification by investing in Gold ETFs”.
Note: Plan A and Plan B will have separate portfolios. There is no assurance that the investment objectives of the scheme will be realized. The Scheme does not assure or guarantee any returns.
*Source: Scheme Information Document
Is this fund for you?
A Multi Asset Allocation Fund is a fund that can invest in multiple asset classes following the predetermined limits of allocation to each of them. Such a fund can invest in asset classes such as debt & money market instruments, equity & equity related instruments and gold and any other specified asset class, if any. The basic purpose of investing in such funds is to diversify investments in assets classes that share very low positive correlation. (Lower positive correlation between two asset classes indicates that they are unlikely to move in the same direction). Usually, these funds predominantly invest in one asset class and have a flexibility of investing in other asset classes a lower proportion of their corpus.
While debt is considered to be safer than equities; equities can help you generate superior returns. Inclusion of gold would improve the diversification further.
Morgan Stanley Multi Asset Fund (MSMAF) is a hybrid fund which combines the benefits of investing in fixed income instruments, equities and gold ETFs in a single fund. However, it is important to know that it offers two investment options, Plan A and Plan B. Plan A aims to invest predominantly in debt instruments and may also invest a smaller portion in equities and equity related instruments only, with no further diversification. Plan B, on the other hand, would have a flexibility of investing also in gold besides investing predominantly in debt and taking a minuscule exposure to equities and equity related instruments.
Portfolio & Investment Strategy
The main focus of MSMAF would be to generate income from through a portfolio comprised of debt and equities in Plan A. In Plan B, the portfolio would be further diversified by making investments in Gold ETFs.
Plan A
| Instruments |
Allocation Range (% to Total Assets) |
Risk Profile |
|
Minimum |
Maximum |
High/Medium/Low |
| Debt and Money Market Instruments (Scheme will not invest in securitised debt) |
80 |
100 |
Low to Medium |
| Equity and Equity Related Instruments |
0 |
20 |
Medium to High |
Plan B
| Instruments |
Allocation Range (% to Total Assets) |
Risk Profile |
|
Minimum |
Maximum |
High/Medium/Low |
| Debt and Money Market Instruments (Scheme will not invest in securitised debt) |
65 |
100 |
Low to Medium |
i)Equity and Equity Related Instruments
ii) Units of Gold ETFs (where each of [i] and [ii] will not exceed 20% of Net Assets.) |
0 |
35 |
Medium to High |
Being predominantly a debt fund, MSMAF will have a combination of various fixed income securities with different maturity profiles in its portfolio. Allocation to various fixed income securities would be done based on fund manager’s view on interest rates and yield curve. Fund manager would closely examine macro economy, monetary policy, public finance and other variables affecting interest rates. Individual securities would be selected for their credit quality and relative valuation.
For the equity investment, MSMAF would use a combination of top down and bottom up approach. Further, the fund manager would adopt a blend style (i.e. a combination growth and value) in picking out individual investment opportunities. The fund will not have any specific bias towards any particular market cap segment. However, the fund manager may also take contra calls on the sectors.
Under Plan B, investments will be made in Gold ETF’s based on considerations of price, tracking error, performance, portfolio, expense ratio, materiality of differences etc., based on the judgment of the fund manager.
MSMAF is suitable for:
- Investors with moderate risk appetite, who need an investment avenue with the potential to add value across all market conditions
- Investors looking to enhance the returns from their portfolio in order to beat inflation
- Investors with a time horizon of at least 3 years
Benchmark
A custom benchmark which is a blend of the following:
Plan A
| CRISIL Composite Bond Fund Index |
80% |
| S&P CNX Nifty |
20% |
Plan B
| CRISIL Composite Bond Fund Index |
70% |
| S&P CNX Nifty |
15% |
| Domestic Prices of Gold |
15% |
Fund Manager Profile
The Fixed Income portion will be managed by Mr. Ritesh Jain, and the Equity and Gold ETFs portion will be managed by Mr. Jayesh Gandhi.
Mr. Ritesh Jain is a Lead Portfolio Manager - Fixed Income at Morgan Stanley. He is bachelor of commerce and also holds a Post Graduate Diploma in Business Management with specialisation in Finance. He has over 13 years of experience in investment management. Prior to joining Morgan Stanley in March 2009, he worked with Principal PNB Asset Management Company Pvt. Ltd. Along with MSMAF, Mr Jain is designated to manage Morgan Stanley Short Term Bond Fund, Morgan Stanley Active Bond Fund, Morgan Stanley Liquid Fund.
Mr. Jayesh Gandhi is a Lead Portfolio Manager - Equity. He is a C.F.A. He has to his credit a postgraduate degree in International Management along with being a Chartered Accountant. He has over 16 years of experience in the field of research and asset management. Prior to joining Morgan Stanley in August 2007, Mr Gandhi has worked he worked with Birla Sun Life Asset Management Company Ltd., Zacks Investment Research, Chicago, USA and Think Values, Salt Lake City, USA and with J V Gokal Finance & Investments Private Limited. Mr Gandhi has also worked with J M Shares and Stock Brokers and Dalal Street Communication. Apart from MSMAF, Mr Gandhi also manages Morgan Stanley A.C.E. [Across Capitalisation Equity] Fund.
Fund Outlook
Given the funds positioning as debt fund with multi-asset diversification, MSMAF’s investment across different asset classes with low positive correlation brings in distinctly different risk/return characteristics. With major exposure towards debt, MSMAF’s performance will be closely linked to the movement in fixed income instruments, while its exposure to gold and equity will help provide additional returns to its investors.
Moreover, this fund is not the first of its kind in this category. Canara Robeco InDiGo, Taurus MIP Advantage, Religare MIP Plus and Kotak Multi Asset Allocation Fund are some of the funds which have a similar investment style though allocation pattern varies from the fund to fund. It is imperative to also consider the performance record of these funds to judge the effectiveness of the multi asset strategy.
How funds following the Multi Asset Strategy have fared?
(Source: ACE MF; PersonalFN Research
NAV Data as on January 17, 2012)
* Since Inception
It is clear from the table above that all the funds following multi asset funds have been launched recently and are yet to establish a performance record for themselves. In the list above, Canara Robeco InDiGo has performed well over last one year. However, close examination of asset allocation of these funds reveals that the variance in the performance is majorly attributed to the weight of a particular asset in the portfolio.
Asset allocation of funds following the Multi Asset Strategy
(Source: ACE MF, PersonalFN Research; Portfolio data as on December 31st 2011)
Latest Portfolio of Canara Robeco InDiGo reveals that it has a significant exposure to gold. Gold as an asset class has been one of the outperformers in the year gone by. This has been one of the major drivers of its performance. Similarly the funds with a meaningful exposure to equity have underperformed as the asset class itself had a difficult year.
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Add Comments
| Comments |
contact@mixmarketing.ca
Feb 25, 2012
Of crosue it depends on the terms of the specific account you're interested in but in general, yes, you can purchase stocks using a cc.I don't recommend it but it can be done. |
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