NEW DELHI: Bank of India Mutual Fund is targeting to garner at least Rs 500 crore through its newly launched multi-asset allocation fund during the primary subscription period.
The new fund offer (NFO) of Bank of India Multi Asset Allocation Fund, which opened for subscription on February 7, will close on February 21.
The new scheme is designed for investors who are seeking low volatility in their portfolio and exposure to multiple asset classes — equity, debt and gold — with better returns.
On the fundraising target, Mohit Bhatia, CEO of Bank of India Investment Managers Private Ltd, told PTI, “We have kept an internal target of at least Rs 500 crore collections across our distribution channels during the NFO period.”
He said that the new scheme is aiming to capture the positives of the three asset classes.
“The structural outlook on Indian equities continues to be quite good over the long term. Further, the general outlook on global and domestic interest rates seems to point to a likelihood of a downward movement over the next few years, which makes a good case for exposure to high-quality debt. Also, India’s inclusion in global bond indices adds a big structural positive for allocation to Indian debt,” Bhatia said.
Additionally, gold as an asset class has worked well as a hedge against inflation and part exposure to this asset class seems to work well as a diversifier over the long term, he added.
The Multi Asset Allocation Strategy comprises investment of 35-40 per cent in equity & equity related instruments, 45-55 per cent in debt & money market instruments, 10-15 per cent in Gold ETF and up to 10 per cent in units issued by REITs and InvITs.
Going forward, the fund house is planning to launch schemes in the Mid Cap and Focused categories in view of strong demand in the two segments. Additionally, they are looking to launch a few passive funds and also expand its debt schemes bouquet with likely launches in categories such as Money Market Fund, Banking and PSU Debt Fund and Low Duration Fund, Bhatia said.
