Mirae Asset Equity Allocator Fund of Fund – It is an open-ended fund of fund scheme predominantly investing in units of domestic equity ETFs. It seeks to provide investors with a broad exposure to large and mid cap equity segments by investing in the units of large cap and mid cap equity ETFs.
Investment Framework – Allocation will be made in Nifty 50, Nifty Next 50 and Midcaps by investing in respective ETFs, effectively aiming to provide allocation to top 250 stocks as per market cap. The portfolio weightage of the respective ETFs would be dependent on the free float market of the corresponding indexes. The fund will have flexibility to be overweight/underweight the free float based weights of the ETFs within a limited range based on how much at discount/premium an ETF is currently trading based on the historical trends of forward P/E.
• Provides exposure to wide array of stocks across large cap and mid cap stocks.
• Passive investment; no fund manager risk.
• Periodic rebalancing of allocation.
• Possibility of generating alpha due overweight/underweight positions based on P/E.
• Equity Taxation.
• Fund of Fund structure ideal for long term holding, as ETF investments can lead to impulsive exits due to screen based trading.
The fund is suitable for long term investors looking to make passive allocation to equity asset class with a long term investment horizon. The investors mostly preferring the ETF route for equity investments can also consider taking exposure to this fund. The potential to make alpha over underlying indexes returns and zero reliance on market liquidity to exit the investments, also make it an efficient avenue over ETFs.
The fund is also suitable for investors focusing majorly on overall asset allocation in their portfolios,
rather than individual investments within each asset class to generate superior returns. The
combined exposure to this fund would effectively provide allocation to top 250 stocks, representing
close to 90% of the total market cap (source: AMFI data as on 30 June 2020).
Fund Manager – Ms. Bharti Sawant
Exit Load – Nil
Benchmark – NIFTY 200 Index (TRI)