Bajaj Allianz Life launches Bajaj Allianz Life Dynamic Asset Allocation Fund: All you need to know

Private life insurer Bajaj Allianz Life launched Bajaj Allianz Life’s Dynamic Asset Allocation Fund to allocate funds between equity and debt, dynamically. The NFO period for the fund ends on September 25.

According to Bajaj Allianz Life, the asset allocation of the fund will be more active in nature. It is based on an in-house quantitative model with limited qualitative input from the fund manager and aims to optimise risk return. This investment strategy will help to minimise volatility and downside risk during market corrections.

For example: In a scenario, when market valuations get more expensive, the fund will reduce equity exposure. Alternatively, with more attractive market valuations, it will increase equity exposure. The asset allocation range of the fund will be: Equity and equity-related instruments: 10-90 per cent, debt and debt-related instruments: 10-90 per cent and money market instruments: 0-80 per cent.

On the launch of the fund, Sampath Reddy, Chief Investment Officer, Bajaj Allianz Life Insurance said, “Having been a part of the industry for over three decades, I have observed that a common challenge retail investor’s face is managing asset allocation independently, depending on changing market conditions or outlook. Bajaj Allianz Life’s Dynamic Asset Allocation Fund will enable investors to seamlessly move their funds in line with market trends. This feature aims to provide customers with peace of mind by dynamically handling asset allocation through a proprietary quantitative model and insights from fund managers. With a disciplined approach, the fund empowers investors on their path to achieving life goals.”

Why invest in dynamic asset allocation funds?

Bajaj Allianz Life in a release said, “Retail investors often struggle to adjust their asset allocation in response to shifting market conditions. This fund offers a solution by employing a proprietary quantitative model and removing the complexity of timing equity-debt allocation changes by a policyholder. There would be limited engagement of the fund manager (on the asset allocation mix) due to the quantitative model-based investment approach. This approach will also help investors to follow a disciplined approach towards asset allocation and reduce individual behavioural biases.”

It further added that the investment strategy not only seeks growth but also aims to minimise volatility and protect against downside risks during market corrections. In the mutual fund industry, Dynamic asset allocation funds (also known as balanced advantage funds) have gained significant traction from investors because they are getting the right advantage at the right time of the market.