The new fund, which is an open-ended dynamic asset allocation fund with a floor of minimum 30 per cent equity, closes on January 29, PGIM said.
This product tries to deliver reasonable downside protection and lower volatility, making it suitable for investors who are seeking capital appreciation over a long period and is categorized as equity-oriented scheme.
A balanced asset allocation helps buy low and sell high, Ajit Menon, the chief executive of PGIM India MF said.
Its dynamic asset allocation model considers 15 years rolling price to earnings (PE) average as long-term average PE to capture the changing trends in the equity markets.
“We hope to collect at least Rs 500 crore from the fund,” Menon told PTI.
The fund seeks to provide capital appreciation and income distribution to investors by dynamically managing asset allocation between equity and fixed income using equity derivatives strategies, arbitrage opportunities and pure equity investments, apart from seeking to reduce volatility by diversifying the assets across equity and fixed income.
The fund will be managed by Aniruddha Naha (for equities), Kumaresh Ramakrishnan (for debt and money markets) and Anandha Padmanabhan (for overseas investments), Menon said.
Balanced advantage fund category is an excellent investment solution as its model-based approach helps in automatically rebalancing investments between equity and fixed income in a tax efficient manner without the investor having to keep a track.
This fund is suitable for investors with moderately high-risk appetite as it has the potential to deliver consistent long-term risk-adjusted returns and smooth investing experience by dynamically allocating money between equity and fixed income instruments, he explained.
