Edelweiss launches multi-asset allocation mutual fund to invest in equity, gold, others; NFO for subscription opens

The new scheme provides investors an opportunity to generate fixed income-like returns in a tax-efficient way.

Radhika Gupta, MD & CEO, of Edelweiss Asset Management, said, “We are excited to unveil the Edelweiss Multi Asset Allocation Fund, a distinctive strategy with a purpose to provide investors a product that is fixed income alternative with enhanced tax efficiency. As part of our ongoing commitment to introducing innovative products that cater to investors’ diverse investment needs, this fund is a timely solution in the multi-asset category that aims to provide low volatile fixed income like returns.”

The fund primarily focuses to generate low volatile fixed-income equivalent returns by investing in fixed-income, equity arbitrage, and gold & silver arbitrage. The portfolio construction will prioritize mitigating volatility, positioning itself as an alternative investment option when compared to other fixed-income products available in the market.

As per the statement, the fund’s indicative asset allocation will be 10– 80 percent towards equity & equity related instruments, 10–80 percent towards debt and money market instruments, 10-30 percent towards commodity ETFs, Exchange Traded Commodity Derivatives (ETCDs) and 0-10 percent towards units issued by REITs and InvITs.

Also, the portfolio construction strategy includes a 35- 40% allocation to Equity Arbitrage, comprising Equity Cash Futures with no open equity exposure. Additionally, there is a 10-15% allocation to Gold & Silver Arbitrage, employing a 100% hedged strategy for Gold & Silver and no open exposure to any other commodity.

Meanwhile, the remaining 45-55% is allocated to fixed-income instruments with a 1–3-year Macaulay duration, including G-Sec, SDL, and AAA-rated corporate bonds.

Moreover, the scheme has a lower LTCG Tax (20% after Indexation) compared to conventional fixed Income products.

Notably, the scheme would be managed by Bhavesh Jain & Bharat Lahoti (Equity), Dhawal Dalal (Debt), Amit Vora (Overseas), and Ashish Sood (Commodities).

Edelweiss MF provides investment solutions ranging across equities, hybrid, fixed income, and alternatives in India.

Updated: 05 Jun 2023, 10:47 PM IST