16 Dec 2023
Equities, bonds, debentures, gold, silver... There are so many places to invest your money. And the rules of investing say it is important for you to invest a little in all of them. Or as we say, do proper asset allocation! But each of these require a different approach and strategy. Managing all these asset classes separately in your portfolio while also managing your full time job or business is difficult. That’s why Kotak’s Multi Asset Allocation Fund does the job for you.
The scheme has the mandate to invests 65%- 80% of the funds in Equities, 10%-25% in Debt instruments, a similar range in commodities. The scheme has also mandate to invest in overseas securities as well as in REITs & InvITs
What’s more, as mandated, each segment - equities, debt, commodities and overseas investments are managed by experts in the respective fields. So, you don’t need to worry about doing the research.
We’ll share a little bit about how each of these fund managers capture returns in their segments. For Equities: The funda is simple - buy low, sell high. When Equity markets appear cheap, the fund manager looks at increasing equity exposure. and when markets go up and valuations start looking expensive, the fund manager starts reducing exposure. What’s more, the manager is free to explore opportunities across sectors and market capitalisation.
For debt Instruments - the fund manager invests as mandated, like in sovereign or government securities and quality corporate bonds. The manager follows a dynamic duration management approach - this means investing across different durations of fixed income securities depending on how the yield in the market is moving. In a very generic way, the fund captures return potential in securities across the yield curve.
The fund manager invests in Commodity ETF’s, looking at the macroeconomic situation. Short-term investments will be to capture arbitrage or other event-based opportunities.
So you can have exposure to each of these asset classes without having to worry about monitoring each of them.
If you’re looking for an investment product, where fund managers actively do the tough job of asset allocation, aims to optimize returns and manage risks for you. Then the multi-asset allocation fund is for you.
Dislcaimer
Mutual fund investments are subject to market risks, read all scheme related documents carefully.