Shriram Asset Management Company, which is part of the Shriram Group, is going to launch the Shriram Multi Asset Allocation Fund on Friday (August 18). The new fund aims to offer long-term inflation-adjusted wealth creation through exposure to multiple assets such as equity, debt, and goldsilver ETFs. The New Fund Offer (NFO) will close on September 1. The fund would also allocate 10 per cent to 25 per cent of funds in high quality (AAA) Short to Medium term debt, preferably in government and government-backed securities to avoid any credit risk; 10 per cent to 25 per cent in goldsilver ETFs, with the option up to 10 per cent in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). The fund's corpus will have between 65 and 80 per cent invested in equity, encompassing 30 to 40 stocks from Shriram AMC's proprietary Enhanced Quantamental Investment (EQI) model. “Analysis of the last five years indicates that the category of Multi Asset Allocation Funds has shown lesser volatility with equity-like returns; hence this is a good option for goal planning. The exposure to gold also gives us a hedge against market volatility, especially during crisis periods and hence reduces the drawdown and gives a quicker recovery back to the earlier level," said Kartik L Jain, MD & CEO, Shriram Asset Management Company. The model will rely on statistical data to make the right investment decisions for better fund performance while integrating quant as well as fundamental inputs for portfolio construction. As per the press statement, the minimum allocation of 65 per cent to equities will allow investors in this fund to benefit from Long Term Capital Gains tax of 10 per cent. Jain added that the Shriram Multi Asset Allocation Fund has a two-tier approach to delivering superior risk-adjusted returns. Firstly, its 'risk parity' approach between equitydebtgold aims to minimise volatility and maximise returns, thereby giving better returns to the investor. Secondly, for the equity allocation, our proprietary Enhanced Quantamental Investment (EQI) model uses an integrated combination of quant and fundamental analysis to create a risk-adjusted equity portfolio that aims to deliver consistent alpha (returns above the benchmark). "We use three factors: low volatility (steady returns), momentum (increasing returns) and low valuation (at the right price) which has shown very positive results in both back testing as well as forward testing. We believe this one fund will appeal well to our investors," he added. Investors can regularly invest in this fund through Systematic Investment Plans (SIP), top-ups or Systematic Transfer Plans (STP) from liquid or overnight funds to meet their financial and family goals. The minimum investment amount for lumpsum is Rs 5,000 while for SIPs it is Rs 1,000 per month or Rs 3,000 per quarter. There is no lock-in period involved. The fund offers the investor the benefit of Long-Term Capital Gains tax (LTCG) @10% (plus surcharge and cess) if they cross Rs 1 lakh of capital gains in a fiscal year. Rebalancing asset allocation through individual buying and selling of equity, debt, or gold might incur capital gains tax with each transaction. However, when the fund manager transacts within the scheme, there is no capital gains tax, making this fund a tax-efficient investment choice. In 2022, Shriram Group revitalised its mutual fund business, partnering with US-based Mission1 Investments LLC as a strategic ally. With this collaboration, Shriram AMC aimed at broadening its product portfolio, offering relevant and differentiated investment solutions to its customers. Shares of Shriram Asset Management closed at Rs 193.05, up by 10.00 per cent. The stock hit an intraday high of Rs 193.05 and intraday low of 176.00.
