Fund of Funds: Mirae Asset Investment Managers India has announced the launch of Mirae Asset Equity Allocator Fund of Fund on 8 September. It is an open-ended scheme investing mainly in units of domestic equity exchange-traded funds. NFO will open for subscription on September 8, 2020, and will close on September 15, 2020. Investors can also invest in this fund of funds without having a Demat account. You should also know what is the fund of funds and for which investors it is better.
What are ‘Funds of Funds’?
Funds of Funds (FoF) are schemes of mutual funds that invest in other schemes. In this way, instead of investing directly in an asset class, fund managers invest money in a scheme that is already invested in it. It can be understood that if the fund manager wants to invest in gold, then he will invest money in the gold scheme investing in gold.
This means that the fund of funds does not have shares or bonds of the company. Instead, fund of funds hold units of other schemes. A fund of funds can invest in many schemes of its fund house or another fund house.
Who should invest?
Investors who want to diversify their portfolios to reduce risk can invest in them. This is better for those who want stable returns from the market without taking any kind of risk.
Its biggest advantage for small investors is that they can diversify their portfolio with less money. It makes it easy to track the portfolio. Nivea is done in different hedge funds, which increases the chances of higher returns on Nivea.
About Mirae Asset Equity Allocator Fund of Fund
- The fund will be benchmarked with the Nifty 200 Index (TRI).
- This fund will be managed by Bharti Sawant.
- Investors can also invest in this fund of funds without having a Demat account.
- Aim to get low-cost exposure to large-cap and mid-cap
- Investors can avail loan exposure from Exchange Traded Fund (ETF) without opening a Demat account.
- Investors can avail equity taxation while investing in Fund of Funds.
- Investors can benefit by using a mutual fund (MF) structure to invest in low-cost ETFs.
- Investors can invest in it through SIP.
- When market dynamics change, it balances allocation.
Swaroop Mohanty, CEO of Mirae Asset Investment Managers India Private Limited, said that as long as the cases of Covid-19 continue to come in this way, the market is likely to remain volatile. In this situation, it becomes a challenge for investors to continuously rebalance the portfolio to maintain an allocation to equity, diversification across different categories and market cap allocation. In such a situation, the Equity Allocator Fund of Fund can be helpful in removing this concern of investors.
How much can you invest?
The minimum initial investment in the scheme will be Rs 5000. After that, there will be a multiple of 1 rupee. The investment aims to achieve market returns with moderate to high risk with low-cost ETFs and long-term capital gains/earnings. Mirae Asset Equity Allocator Fund of Fund will offer growth options and dividend options (pay-out and re-investment) along with regular plans and direct plans.
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