The minimum lump-sum investment amount is Rs 5,000; while for SIP, it’s Rs 1,000 per instalment or Rs 3,000 per quarter.
Shriram Asset Management Company recently started the Shriram Multi Asset Allocation Fund. The primary objective of this fund is to achieve strong returns over an extended period by investing in a diverse range of assets, including equities. The strategy involves investments in debt instruments as well as gold-silver exchange-traded funds (ETFs). The New Fund Offer (NFO) will conclude on September 1. “The Shriram Multi Asset Allocation Fund has a two-tier approach to delivering superior risk-adjusted returns. Its ‘risk parity’ approach between equity/debt/gold aims to minimise volatility and maximise returns, thereby giving better returns to the investor,” Kartik L Jain, MD and CEO of Shriram Asset Management Company, said in a recent interview with a media portal.
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How To Invest In The Fund?
Investors have the option to regularly invest in this fund through a Systematic Investment Plan (SIP), Top-up, or Systematic Transfer Plan (STP) using funds from liquid or overnight investments to achieve their financial and family objectives. The minimum lump sum investment amount is Rs 5,000; while for SIP, it’s Rs 1,000 per instalment or Rs 3,000 per quarter. Notably, these investment options do not come with any lock-in periods.
Where does the fund generate returns?
The fund directs 65% to 80% of its overall assets into equities. This portion includes a selection of 30 to 40 stocks drawn from Shriram AMC’s Enhanced Quantamental Investment (EQI) model. With its significant allocation to equities surpassing 65%, the fund also offers investors the opportunity to capitalise on a 10% benefit in long-term capital gains tax.
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The Fund’s Key Features
Within the plan, 10% to 25% of the total funds are directed towards short to medium-term debt instruments that hold higher ratings (AAA Rating), ensuring mitigation of credit risk. Additionally, there exists the flexibility to allocate 10% to 25% into the Lava Gold/Silver ETF offered by the Government and Government-backed securities. Furthermore, up to 10% of the funds can be invested in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).
Karthik L Jain further highlights that a thorough examination of the past 5 years indicates that multi-asset allocation funds have demonstrated minimal volatility while yielding returns comparable to equities. In addition to this, these funds also include investments in gold as a precautionary measure against potential crises. Investing in gold serves as a safeguard against market instability.
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Tax exemption
The new fund provides investors with the advantage of a 10% lower tax rate on long-term capital gains, applicable if gains go beyond Rs 1 lakh in a fiscal year. While investors need to pay capital gains tax separately for each transaction when they individually buy or sell equities, debt, and gold to adjust their asset balance, the fund manager’s transactions within the fund are exempt from capital gains tax. These two factors together make this fund a more appealing option for those aiming to save on taxes.
