New Delhi: LIC Mutual Fund Asset Management Limited, an associate company of Life Insurance Corporation of India (LIC), is going to launch a balanced advantage fund that will invest in various financial instruments such as equity, debt and money market instruments.
The fund will take into consideration factors such as valuation and earning drivers before investing in a select instrument. LIC Mutual Fund Asset Management will use a fundamental-driven mathematical approach for investments.
Dinesh Pangtey, the CEO at LIC Mutual Fund, explained the investment model and said that bond yields, in a way, represent the opportunity cost of investing in equities and perception of risk appetite.
“We at LIC MF would be using this inverse relationship between equity and debt in LIC MF BAF for switching from equity to debt and vice versa, based on a fundamental driven mathematical model,” he added.
The technique mention above will be used to find out the optimal fund allocation. Factors such as interest rates, one-year forward price-earnings ratio, and earnings yield will be taken into consideration to optimise fund allocation.
Important details about LIC MF’s Balanced Advantage Fund:
– The Balanced Advantage Fund will be open for subscription from October 20 and will close on November 3.
– LIC MF has selected Yogesh Patil as the fund manager for the equity portion while Rahul Singh will take care of the debt portion of the fund.
– The fund will target a 65% allocation for equity. In this way, investors will be able to benefit from the equity taxation benefits. Also Read: WPI inflation eases to 10.66% in September on lower food prices
– The MF will charge a 1% exit load if the investor redeems before one year of subscription. However, investors won’t be charged for exiting after one year of the date of allotment. Also Read: Capgemini Recruitment: French IT firm to hire B. Tech, MCA freshers, check eligibility