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Nippon India Asset Allocator FoF in a nutshell
“The primary investment objective of the Scheme is to seek long term capital growth by investing in units of equity oriented schemes, debt oriented schemes and gold ETF of Nippon India Mutual Fund.”
From the Scheme Information Document
It will invest a maximum of 100% in equity and debt, and up to 25% in their Gold ETF depending on their proprietary model that will take macro and market factors into account to arrive at a target allocation to each asset class.
“The Scheme will follow an in-house proprietary model to determine the optimum allocation in equity, debt and gold. The rebalancing will be done on a monthly basis.
The model consists of following broad parameters:
Trend Following (Moving Averages, etc.)
Valuations
Yield Curve
Macro Fundamentals
Relative Asset Class Momentum”
It will benchmark against the CRISIL Hybrid 50 + 50 – Moderate Index
Rule-based Tactical Allocation
A decision-making framework that relies on how the fund manager feels that morning is fraught with uncertainty. If it did well, was it luck, or was it intuition? Rule-based frameworks are not necessarily better at absolute quality of decision-making, but they offer a tight feedback loop to gauge the validity of those rules applied over a repeated set of decisions.
The Nippon India Asset Allocator FoF product presentation mentions a number of macro and market-level indicators to arrive at its target allocation. The image below is an illustration of how it starts with a standard allocation and layers on the various indicators it will consider to arrive at the final split.
Performance of various Asset Classes and Sub Asset Classes keep changing over time.
Even the best of minds cannot always predict which asset class will do well.
But we have a solution for you!
Nippon India Asset Allocator FoF invests across Equity oriented schemes, Debt oriented
schemes and Gold ETF of Nippon India Mutual Fund with the help of an in-house
proprietary model. This model decides allocation across Large Cap, Mid Cap, Small Cap,
Short Term Debt, Long Term Debt and Gold ETF.
This dynamic framework uses a robust set of Macro, Micro & Market Indicators with an aim
to deliver superior risk adjusted returns.
This ensures that you are always invested in the asset classes where the growth is most
likely to be!
