LIC MF Multi Asset Allocation Fund: NFO Details and Investment Insights


LIC Mutual Fund has announced the launch of its LIC MF Multi Asset Allocation Fund, a new open-ended mutual fund scheme. This fund is designed to provide investors with a diversified approach by allocating investments across equity, debt, and gold asset classes. The New Fund Offer (NFO) opens for subscription on January 24, 2025, and will remain available until February 7, 2025.

Objective of the Fund

The primary objective of the LIC MF Multi Asset Allocation Fund is to achieve long-term capital appreciation. By diversifying investments across equity, debt, and gold ETFs, the fund aims to balance the potential for high returns with controlled risk levels. The inclusion of multiple asset classes allows investors to benefit from different market conditions, enhancing portfolio resilience during periods of volatility.

Benchmark Index

The performance of the LIC MF Multi Asset Allocation Fund will be measured against a composite benchmark. This benchmark reflects the fund’s multi-asset strategy, combining equity, fixed income, and commodity market indices:

  • 65% allocation to the Nifty 500 Total Return Index (TRI)
  • 25% allocation to the Nifty Composite Debt Index
  • 10% allocation to Domestic Gold Prices

This blended benchmark offers an ideal yardstick to evaluate the fund's performance in achieving its stated objectives.

Key Fund Details

  • NFO Period: January 24 to February 7, 2025
  • Minimum Investment: ₹5,000
  • Exit Load: Nil for up to 10% of units redeemed or switched within 1 year; thereafter, 1% for redemption within a year
  • Scheme Reopens for Ongoing Purchase/Redemption: February 18, 2025

Management Team

The LIC MF Multi Asset Allocation Fund is managed by a highly experienced team of professionals, each specializing in a specific asset class:

  • Mr. Nikhil Rungta: Focuses on equity instruments with expertise in identifying high-growth potential stocks.
  • Mr. Sumit Bhatnagar: Specializes in debt securities, ensuring a balance of safety and stable income.
  • Mr. Pratik Shroff: Manages gold and commodity-linked investments to add a layer of inflation protection.

Why Invest in a Multi-Asset Allocation Fund?

Multi-Asset Allocation Funds are increasingly becoming popular among investors looking for diversification within a single fund. These funds aim to minimize risks associated with investing in a single asset class by spreading investments across different assets. The benefits include:

  1. Risk Management: Exposure to multiple asset classes can reduce the impact of market fluctuations.
  2. Inflation Hedge: Gold serves as a safeguard during inflationary periods or economic uncertainties.
  3. Portfolio Stability: Debt investments provide income stability, while equities deliver growth potential.
  4. Convenience: Investors gain access to a well-diversified portfolio managed by experts, eliminating the need for individual asset selection.

Market Trends Supporting Multi-Asset Funds

Hybrid funds, which include Multi-Asset Allocation Funds, are witnessing significant growth. According to recent AMFI data, hybrid mutual funds saw their assets under management (AUM) grow by 27% in 2024, rising from ₹6.90 lakh crore in January 2024 to ₹8.77 lakh crore by November 2024. This growth underscores investors' increasing preference for funds offering diversification and steady returns.

Considerations for Investors

While the LIC MF Multi Asset Allocation Fund provides the advantage of a diversified portfolio, investors should evaluate the scheme’s alignment with their financial goals and risk tolerance. Multi-asset funds are best suited for those seeking long-term capital appreciation while avoiding concentration risk in a single asset class.

Conclusion

The LIC MF Multi Asset Allocation Fund is an excellent investment opportunity for those seeking a balanced approach to wealth creation. By leveraging the performance of equities, the stability of debt, and the safety of gold, the fund offers an all-in-one solution for building a resilient investment portfolio.

However, like all investments, it is essential to read the offer document carefully and consult with financial advisors to ensure the fund aligns with your individual goals and risk appetite.

Disclaimer: Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.

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