ITI Mutual Fund AMC has recently launched a new mutual fund scheme known as ITI Balanced Advantage Fund. Investors can subscribe to the fund during the New Fund Offer period, ending on December 23, 2019.
George Heber Joseph, CEO of ITI Mutual Fund is managing the fund. Through this scheme, he aims to provide long term consistent returns by dynamically allocating the assets under management. Based on the expertise of investment professionals and proper market analysis, assets would be accordingly invested in equity and debt instruments.
Since the fund is a Balanced Advantage Fund, the fund manager can switch between equity and debt allocation as per his wishes, and doesn’t need to fulfill any minimum/maximum asset allocation limit. However, for making the fund tax-efficient, the equity investment shouldn’t be less than 65% of the total assets.
Features of ITI Balanced Advantage Fund
- The scheme is a multi cap equity fund that would follow a complex investment strategy to dynamically allocate the assets to equity and debt securities, as per the market sentiment.
- The minimum investment amount for the fund is ₹5000, and further investment amount can be in multiples of ₹1.
- The benchmark for the fund is CRISIL Hybrid 50+50 – Moderate Index
- The fund plans to invest in only those debt securities that have a residual maturity of upto 3 years.
- The net equity exposure of the fund can range from 0% to 100%, while debt exposure can range from 0% to 35%. The 65% minimum equity exposure is maintained for tax-saving purposes.
How is ITI Balanced Advantage Fund different from other funds?
- The AMC uses internal research methodology for proficient asset allocation, which gives more importance to fundamental factors than any transitory factors with short term effects.
- Equity exposure of the fund (including derivatives) has no upper limit, which makes it better than those funds that have a maximum capping on different asset classes. Thus, the fund manager can invest as per his understanding of the market, without any restrictions.
- One of the key differentiators is that the fund only invests in highly rated debt instruments with a maturity period of up to 3 years. Short duration of debt instruments deliver better returns due to minimal volatility. Thus the fund aims to generate consistent returns from this specific asset allocation.
Who should invest in ITI Balanced Advantage Fund?
The fund manager of ITI Balanced Advantage Fund, George Heber Joseph said, “ITI Balanced Advantage Fund is an excellent investment solution for all types of investors which helps to ride through emotions of greed and fear smoothly. The fund 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. We are quite excited to offer this product to our IFA partners & investors and this is an outcome of our focus on product innovation”.
As the fund uses complex investment strategy for asset allocation, amateur investors are advised to look for other investment avenues. This fund is suitable for those investors who have been investing for a couple of years and are versed with the working of mutual funds. An amateur, who doesn’t have adequate financial knowledge might not be able to comprehend the fund manager’s stock and asset class selection.