LIC Mutual Fund announced the launch of LIC MF Balanced Advantage Fund (“LICMF BAFâ€), an open-ended Dynamic Asset Allocation Fund, which would invest across equity and debt & money market instruments using several parameters like valuation and earning drivers.
The Investment Strategy for LIC MF Balanced Advantage Fund, essentially a hybrid scheme,would be uniquely driven by “Fundamental Driven Mathematical Modelâ€.
Explaining the dynamics of this model-based unique investment approach for the new fund offer in LIC MF BAF, Mr. Dinesh Pangtey, CEO, LIC Mutual Fund Asset Management Ltd said: “Bond yields, in a way, represent the opportunity cost of investing in equities and perception of risk appetite. We at LIC MF would be using this inverse relationship between equity and debt in LICMF BAF for switching from equity to debt and vice versa, based onFundamental Driven Mathematical Model.â€
LICMF BAF model would precisely use this relationship to determine optimum asset allocation level for the scheme. The model uses Interest rates, one year forward Price Earnings ratio and Earnings Yield, to arrive at the optimum asset allocation level.
The model automatically arrives at asset allocation between Equity & Debt, as the underlying fundamentals change. However, Equity & Debt portfolio shall be managed actively by seasoned fund managers, Mr Pangtey added.
The model is designed in such a way that it automatically factors in, any change in any of the parameters, on a real time basis and keep changing the Price to Earning band using Linear Progression.
LICMF BAF would not only help investors participate in the market rally, but more importantly it would aim to minimise the downward risk, and this would be a crucial part for any investment strategy, Mr Pangtey said.
LICMF BAF will be benchmarked against a customised index, LIC MF Hybrid Composite 50:50 Index. The index composition will be 50 per cent Nifty 50 TRI and 50 per cent Nifty 10 yr Benchmark G-Sec.
The fund endeavours to keep gross equity allocation 65% or above to enable investor avail equity taxation Benefit.
The New Fund Offer (NFO) opens on Wednesday, October 20, 2021, and would close on Wednesday, November 3, 2021.
The fund managers for LIC MF BAF will be Mr. Yogesh Patil for Equity portion, and Mr. Rahul Singh for the Debt portion.
About LIC Mutual Fund
LIC Mutual Fund (LICMF) was established on 20th April 1989 by LIC of India, is one of the oldest & leading Mutual Fund operating in India which is sponsored by LIC of India and trusted brand in the Insurance Industry. LICMF offer a complete basket of 25 products covering Debt, Equity, Hybrid, Passive and Solution oriented themes. We are a mid-sized MF having Asset Under Management (AuM) of Rs. 21,198 crores as on September 30, 2021. We are currently ranked 20th among 43 AMCs in India in terms of AAUM. We have 29 Branch Offices, 182 Investor Service Centres and 45,858 Distributors empanelled with us.
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