Benchmark Mutual Fund has for the first time gone beyond simple index funds and filed an application with the Securities and Exchnage Board of India (SEBI) for a hybrid scheme, which will have a mix of domestic and overseas equities, debt and fixed-income securities as well as gold exchange-traded funds (ETFs).
Benchmark Multi Asset Solutions Fund will offer three plans – aggressive, moderate and conservative -- depending on the investor’s risk profile.
The aggressive plan would allocate 40-85 per cent of the portfolio in Indian equities, up to 35 per cent in foreign stocks, 5-40 per cent in gold ETF and up to 10 per cent in debt.
The moderate plan would have 20-65 per cent portfolio in Indian stocks, up to 25 per cent in overseas securities, 10-40 per cent in debt papers, and 5-30 per cent in gold ETFs.
The conservative plan further cuts down on exposure to Indian shares to 10-40 per cent. Up to 15 per cent would be invested in overseas securities. A large portion of the portfolio -- 40-65 per cent – under this plan would be invested in low-risk debt and fixed income securities, and 5-25 per cent in gold ETF.
“The idea is to provide asset allocation solutions to investors, with each component of the fund replicating some index or the other. So we are not completely departing from our philosophy of indexation,” Rajan Mehta, executive director, Benchmark Mutual Fund, told Value Research.
The equity component of each plan would invest in indexes such as S&P CNX Nifty and CNX Nifty Junior within the Indian market, and S&P Global 100 Index for international equity exposure.
The performance of the aggressive plan would be benchmarked to CNX 100 index, while the performance of the moderate and the conservative plans would be compared to Crisil MIP Blended Index.
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