LIC MF Multi Asset Allocation Fund: A Balanced Approach to Uncertain Markets
Jan 24, 2025
LIC Mutual Fund has launched LIC MF Multi Asset Allocation Fund, it is an open-ended equity scheme investing in Equity, Debt and Gold.
The global economy is navigating choppy waters, with heightened volatility driven by geopolitical tensions, trade wars, and economic shifts. The return of Donald Trump as U.S. President, or 'Trump 2.0,' has further fueled uncertainty, as protectionist policies, unpredictable trade negotiations, and regulatory changes cast a shadow over financial markets.
Against this backdrop, investors are increasingly turning to diversified investment options like multi-asset funds to safeguard their portfolios while still participating in growth opportunities.
[Read: 3 Best Multi Asset Allocation Funds for 2025 - Top Performing Multi Asset Allocation Mutual Funds in India]
The LIC MF Multi Asset Allocation Fund, launched as part of LIC MF's New Fund Offer (NFO), provides a promising solution for navigating these turbulent times.
Details of LIC MF Multi Asset Allocation Fund:
Investment Objective |
The investment objective of the Scheme is to generate long term capital appreciation by investing in diversified portfolio of equity & equity related instruments, debt & money market instruments and units of Gold Exchange Traded Funds (ETFs). There is no assurance that the investment objective of the Scheme will be achieved. |
Category |
Sectoral/Thematic Fund |
SIP/STP/SWP |
Available |
Min. Investment |
Rs 5,000/- and in multiples of Re 1 thereafter. Additional Purchase Rs 500/- and in multiples of Re 1 thereafter. |
Face Value |
Rs 10/- per unit |
Entry Load |
Nil |
Exit Load |
-
For upto 12% of units held - If units redeemed/switched out within 3 months from allotment date Nil
-
Remaining 88% of units held - 1% of applicable NAV
-
If units redeemed/switched out after 3 months from allotment date NIL
|
Plans |
|
Options |
-
Growth
-
Income Distribution cum Capital Withdrawal (IDCW)
|
Income Distribution cum Capital Withdrawal (IDCW) |
- Mr Nikhil Rungta
- Mr Sumit Bhatnaga
- Mr Pratik Harish |
Benchmark Index |
65% Nifty 500 TRI + 25% Nifty Composite Debt Index + 10% Price of Domestic Gold. |
Issue Opens: |
January 24, 2025 |
Issue Closes: |
February 07, 2025 |
(Source: Scheme Information Document)
What will be the investment strategy for LIC MF Multi Asset Allocation Fund?
LIC MF Multi Asset Allocation Fund will maintain an allocation across key asset classes-Equity, Debt and Gold. Further, the Scheme shall follow an active investment strategy.
The fund manager retains the discretion to adjust allocations based on prevailing market conditions, risk management requirements, and to optimize returns. The allocation between equity, debt, Gold ETFs will be managed as per the stated asset allocation pattern. The fund will employ a tactical asset allocation approach, which adjusts exposure to each asset class depending on the prevailing economic and market conditions in line with the asset allocation pattern.
(Source: PPT - LIC MF Multi Asset Allocation Fund)
The equity portion will invest across market caps. The equity strategy will incorporate both top-down and bottom-up approaches to identify opportunities. The debt component will focus on high-quality fixed-income instruments, balancing duration and credit risk to optimize returns in varying interest rate environments.
The Scheme may also invest in the Silver ETFs and hybrid securities viz. units of REITs and InvITs for diversification and subject to necessary stipulations by SEBI from time to time.
How will the scheme allocate its assets?
Under normal circumstances, LIC MF Multi Asset Allocation Fund will hold an allocation of 65% to 80% in Equity and equity related instruments, 10% to 25% in Debt & Money Market Instruments, 10% to 25% in Units of Gold ETFs, 0% to 10% in Units of Silver ETFs and 0% to 10% in Units issued by Real Estate Investment Trusts (REITs) & Infrastructure Investment Trusts (InvITs)
Should investments in LIC MF Multi Asset Allocation Fund be considered?
LIC MF Multi Asset Allocation Fund stands out as a balanced investment option for investors looking to minimize risks while aiming for steady returns. This fund is designed to allocate assets dynamically based on market conditions, reducing the impact of volatility while maximizing growth potential.
One of the key advantages of this fund is its ability to offer stability through fixed-income securities while benefiting from equity market growth. The inclusion of gold as a part of its portfolio further acts as a hedge against inflation and global economic uncertainties. For conservative investors or those new to mutual funds, the multi-asset strategy can be a safer entry point compared to purely equity-focused funds.
However, it's important to consider certain factors before investing. Multi-asset funds, while diversified, may not outperform pure equity funds in bullish markets due to their limited equity exposure. Additionally, the fund's performance will largely depend on how effectively the fund manager balances asset allocation during varying market conditions. Investors must also evaluate the expense ratio and compare it with other funds offering a similar strategy.
Ultimately, investments in LIC MF Multi Asset Allocation Fund should align with your financial goals, risk tolerance, and investment horizon. It can be a prudent choice for investors seeking a balanced portfolio, but thorough research and periodic performance reviews are essential to ensure it meets your expectations.