How To Invest In Shriram Multi-Asset Allocation Fund, Recently Launched

The Shriram Multi Asset Allocation Fund was just launched by Shriram Asset Management Company. This fund’s main goal is to generate substantial returns over a long period of time by investing in a variety of assets, including stocks. The approach includes investments in debt instruments and exchange-traded funds (ETFs) for gold and silver. On September 1, the New Fund Offer (NFO) will come to an end. A two-tiered strategy is used by the Shriram Multi Asset Allocation Fund to provide higher risk-adjusted returns. According to Kartik L. Jain, MD and CEO of Shriram Asset Management Company, “Its ‘risk parity’ approach between equity, debt, and gold seeks to minimize volatility and maximize returns, thereby giving better returns to the investor.”

How Might One Invest in the Fund?

To fulfill their financial and family goals, investors may choose to make recurring deposits in this fund via a Systematic Investment Plan (SIP), Top-up, or Systematic Transfer Plan (STP), utilizing money from liquid or overnight assets. The minimum amount to invest in one lump payment is Rs 5,000; the minimum amount to invest in a SIP is Rs 1,000 every installment or Rs 3,000 per quarter. Notably, there are no lock-in periods associated with these investing alternatives.

Where does the fund make money?

65% to 80% of the fund’s total assets are invested in stocks. A 30 to 40 stock pick from Shriram AMC’s Enhanced Quantamental Investment (EQI) model is included in this section. The fund gives investors the chance to benefit from a 10% reduction in long-term capital gains tax because of its substantial allocation to stocks, which exceeds 65%.

The Fund’s Main Characteristics

In order to mitigate credit risk, 10% to 25% of the total funds allocated to the plan are allocated to short- to medium-term debt instruments with better ratings (AAA Rating). Furthermore, there is the option to invest 10% to 25% of your portfolio in the Lava Gold/Silver ETF, which is provided by the government and government-backed assets. Additionally, real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) might each receive up to 10% of the money.

Karthik L. Jain emphasizes further that a careful review of the last five years shows that multi-asset allocation funds have shown little volatility while producing returns similar to stocks. Additionally, as a safety buffer against unforeseen crises, these funds also hold gold interests. Gold investments provide protection against market volatility.

a waiver of taxes

Investors in the new fund benefit from a 10% reduced tax rate on long-term capital gains that is applied if profits exceed Rs 1 lakh in a fiscal year. The fund manager’s activities inside the fund are free from capital gains tax, however investors must pay capital gains tax separately for each transaction when they individually purchase or sell securities such as gold, debt, or stocks to change their asset balance. Together, these two elements make this fund a more attractive choice for anyone looking to reduce their tax liability.