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| Home > Offerings > Equity Funds > IDFC Asset Allocation Fund |
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| Investment Objective |
| The primary objective of Scheme is to generate capital appreciation through investment in different mutual fund schemes primarily local funds based on a defined asset allocation model. However, there can be no assurance that the investment objective of the scheme will be realized. |
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| Investment Style |
| The scheme will be a Fund of Fund scheme that can invest in a mix of ETFs, domestic and offshore Mutual Fund schemes. The FoF will use a multi-manager approach and can invest in schemes of IDFC MF as well as other mutual funds. |
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| The scheme will offer 3 different plans –Conservative Asset Allocation plan (Conservative AA Plan), Moderate Asset Allocation plan (Moderate AA Plan) and Aggressive Asset Allocation plan (Aggressive AA plan) that will offer 3 different risk profiles for investors. Conservative AA Plan will target the lowest risk profile followed by Moderate AA Plan. Aggressive AA will be the highest risk profile asset allocation. |
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| The asset allocation under the scheme will be as follows: |
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| Conservative AA Plan: |
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% to net assets |
Risk profile |
| Equity Funds |
10 - 15 |
Low to Medium |
| Debt Funds |
45 - 50 |
Low to Medium |
| Liquid Fund |
45 -50 |
Low to Medium |
| Alternate |
0 |
- |
| Money market securities |
0-15 |
Low |
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| Moderate AA Plan: |
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% to net assets |
Risk profile |
| Equity Funds |
25 - 30 |
Medium |
| Debt Funds |
60-70 |
Medium to High |
| Liquid Fund |
0 -5 |
Low to Medium |
| Alternate |
5 -10 |
Low to medium |
| Money market securities |
0-15 |
Low |
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| Aggressive AA Plan : |
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% to net assets |
Risk profile |
| Equity Funds |
45 - 50 |
High |
| Debt Funds |
35-45 |
Medium |
| Liquid Fund |
0 -5 |
Low to Medium |
| Alternate |
10 - 15 |
Low to medium |
| Money market securities |
0-15 |
Low |
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| Asset class explanation |
| 1) |
Equity Funds– It will primarily consist of allocations to local equity funds/ ETFs/ Index funds. There can also be a small allocation (0-5% of net assets) to offshore emerging market equity funds, depending on the quantum of allocation to equity and the positioning of the fund. Within active local equity funds the allocation can be to large cap, diversified, thematic or mid cap strategies. |
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| 2) |
Debt Funds– It will consist of allocation to local debt funds with different maturity profile. The two key categories to which allocations will be made will be short maturity funds (0-5 year maturity) and long maturity fund |
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| 3) |
Liquid Funds– It will consist of allocation to liquid funds. |
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| Alternate – It will consist of allocations to offshore commodity equity funds as well as domestic Gold ETFs.. Offshore commodity equity funds are funds that would invest in securities of companies that deal in commodities/commodities related activities. |
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| The strategy seeks to combine benefits of asset allocation and manager diversification in a single product. Asset allocation allows investors to improve their risk adjusted returns as different asset classes such as equity, fixed income and commodities offer lower correlations with each other. Multi-manager approach is expected to diversify allocation to different managers in order to reduce performance risk of any individual manager on the scheme. Additionally FoFs give fund manager the flexibility of tailoring portfolios by participating in funds with different styles within each asset class and to easily switch styles depending on the view of the markets. |
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