India Unveils First Multi-Asset Mutual Fund with Dividend Yield Strategy

By siliconindia  |  Monday, May 13, 2024

India Unveils First Multi-Asset Mutual Fund with Dividend Yield Strategy
Bajaj Finserv Asset Management Company (Bajaj Finserv AMC) introduced the Bajaj Finserv Multi Asset Allocation Fund, marking the nation's inaugural multi-asset fund with a dividend yield strategy. The scheme's New Fund Offer (NFO) is accessible until May 27. The mutual fund entity emphasized that dividends are contingent upon declaration, with no guarantee that companies will sustain dividend payouts in the future.
Bajaj Finserv Mutual Fund highlighted the scheme's susceptibility to situations where investments in securities might not yield dividends or where companies declare lower dividends in subsequent years, coinciding with the scheme's investments. This vulnerability stems from the fluctuating profitability of companies, which significantly influences their dividend-declaring capacity.
The Bajaj Finserv Multi Asset Allocation Fund offers a diversified portfolio across various asset classes, including equities, fixed-income instruments, commodities such as gold and silver ETFs, and REITs/InvITs. With an equity allocation ranging from 35-80%, the fund employs a multi-theme, multi-sector, and multi-cap approach to investment.
The fund's benchmark includes 65% Nifty 50 TRI, 25% NIFTY Short Duration Debt Index, and 10% domestic gold prices. Bajaj Finserv Multi Asset Allocation Fund will be collectively managed by Nimesh Chandan, Sorbh Gupta, Siddharth Chaudhary, and Vinay Bafna across equity, fixed income, and commodities investment categories.
According to Ganesh Mohan, CEO of Bajaj Finserv AMC, this fund has the ability to provide investors with access to multiple asset classes through a single investment avenue. He stated, "Our aim is to offer a well-rounded portfolio that can navigate through various market scenarios and deliver consistent returns".
Nimesh Chandan, CIO of Bajaj Finserv AMC, further highlighted the focus on dividend yield-based investing to minimize volatility impact and maximize returns. Chandan stated, "Investors seeking reasonable returns, professional asset allocation, and an all-weather investment avenue with low volatility compared to pure equity funds can consider Bajaj Finserv Multi Asset Allocation Fund".
Although the fund offers a distinctive investment opportunity, investors should recognize that dividends depend on companies' declarations, with no assurance of future payouts. Furthermore, there is no entry load, but an exit load applies for redemptions/switch-outs within one year from the allotment date. Additionally, investors are advised to conduct a comprehensive evaluation of their risk tolerance, investment horizon, and retirement objectives before committing funds.

ON THE DECK