New Delhi: LIC Mutual Fund Asset Management Limited will launch a Balanced Advanced Fund. It will be an open-ended dynamic asset allocation fund, which will invest in equity, debt and money market instruments. The new fund offer (NFO) will open for subscription on October 20 and close on November 3. Yogesh Patil will be the fund manager for LIC MF BAF and Rahul Singh will be the debt manager. LIC MF BAF is benchmarked against the custom index, LIC MF Hybrid Composite 50:50 Index. The index has 50 per cent Nifty, 50 TRI and 50 per cent Nifty 10-year benchmark.
The Balanced Advantage Fund grows rapidly
The fund will aim to maintain a total equity allocation of 65 per cent or more to enable investors to take advantage of equity taxation. Balanced affidavit funds have taken a big leap in popularity over the last few years. This is because asset management companies (AMCs) use derivatives to reduce their effective equity exposure to less than 65 percent, while keeping total exposure at 65 percent or more. This guarantees a low risk level tax like equity. If the equity-oriented mutual fund is redeemed after one year, investors are taxed at 10 per cent on capital gains above Rs 1 lakh.
No exit load after completion of 12 months
Redemption a year ago will have 1 per cent exit load, which will be charged only more than 12 per cent of the allotted units. There will be no exit load after completion of 12 months from the date of allotment.
Indicates the value of the investment opportunity and the appetite for risk
Dinesh Pangte, CEO of LIC Mutual Fund, said bond yields, in a way, reflect the value of investment opportunities in equities and risk appetite. We will use this inverse relationship between equity and debt in LIC MF BAF in LIC MF from equity to debt and, conversely, based on a fundamentally running mathematical model.
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Balanced Advantage Fund launched by LIC Mutual Fund, invest from October 20