PGIM India Balanced Advantage Fund: PGIM India Mutual Fund has launched ‘PGIM India Balanced Advantage Fund’. It will open for NFO subscription from 15 January 2021 and will close on 29 January 2021. The fund’s benchmark index is the CRISIL Hybrid 50 + 50 Moderate Index. The initial minimum investment in this scheme is Rs 5000 and then after that it will increase in multiple of Rs 1. The objective of this scheme is to increase the income of investors.
Special features of the fund
-PGIM Balanced Advantage Fund is an open-ended dynamic asset allocation fund with a minimum floor floor of 30% equity.
This product is very good for investors who want to increase their capital in the long term.
Under this fund, there will be safeguards to prevent the fall in investment and methods of reducing volatility will be adopted.
Based on the DAAAF model, the decision on asset allocation will be made, which will help to ‘buy less and sell more’.
– Life insurance company selected by AMC will be covered by group life insurance.
Minimum investment is Rs 5000
The initial minimum investment in this scheme is Rs 5000 and then after that it will increase in multiple of Rs 1. The additional application amount is 1000 rupees and this will also increase in multiple of one rupee after this. The scheme will adopt the tax efficient dynamic asset allocation model as the fund is in the category of equity oriented scheme. The minimum allocation of 65 per cent in equity will be a mixture of directional equity and arbitrage.
There will be three filters to enter this investment area.
First- 7 out of 10 years operating cash flow will be positive.
Second – corporate governance will be monitored
Third – the debt to equity ratio will be less than 3.
Will work like an equity fund
More than 10% of the allocated units will be 0.50% exit load on any redemption / switch out (any redemption / switch out of date schemes can happen without 90% of exit load). This condition will come when units are switched out or units are redeemed within 90 days of the allocation of units.
5 installments of at least 1000 thousand rupees. Thereafter for monthly and quarterly SIP in multiple of one rupee. The top up for monthly and quarterly SIPs will be in multiple of Rs 100 and Re 1. The Systematic Investment Plan will also feature Smart SIP.
Insurance cover is also available
There will be a group life insurance cover from the life insurance company selected by AMC. This will cover insurance for those investors who are eligible to avail this facility. This feature will be completely free. AMC will pay the premium for this life insurance cover.
Re-balancing between equity and fixed income
Ajit Menon, CEO of PGIM India Mutual Fund, said that the Balanced Advantage Fund category is an excellent investment solution for investors. It works on a model that automatically re-balances between equity and fixed income. This work is done in such a way that investors’ tax is saved. For this, investors do not even need to track it.
The dynamic asset allocation model that the PGIM India Balanced Advantage Fund will adopt for this will treat the 15-year rolling PE average as a long-average PE to capture the changing trend in the equity market. As the market matures, we believe that this feature will keep this model relevant.
For whom better
This fund is suitable for investors who want to take moderate high risk. This fund has the ability to continuously provide long term risk adjusted returns. Also, allocation of investment between equity and fixed income instruments effectively will prove to be a great experience for investors.
This scheme will try to reduce volatility by diversifying investment in equity and fixed income assets. The fund will be managed by Anirudh Naha (for equity investment), Kumaresh Ramakrishnan (for debt and money market investment) and Anand Padmanabhan (for foreign investment).