Nippon India Asset Allocator FoF NFO – Review

Nippon India Asset Allocator FoF NFO – Review


Nippon India Asset Allocator FoF NFO would open for subscription on January 18, 2020. This fund of funds would invest in equity, debt and gold ETFs of Nippon India Mutual Funds. This is similar to multi asset mutual fund, but invests in other funds/ETFs and without any cap in any particular asset. In this article, we would provide Nippon India Asset Allocator FoF NFO issue details, review and indicate whether one should invest in such fund of funds.

Also Read: PFC NCD bonds offer 7.15% Interest Rates – Should you subscribe?

Nippon India Asset Allocator FoF – NFO Details

This is an open-ended mutual fund scheme. Here are the NFO issue details.

Nippon India Asset Allocator FoF – NFO Issue Details
Scheme Opens 18-Jan-21
Scheme Closes 01-Feb-21
Scheme reopens for continous purchase/sale 15-Feb-21
Minimum investment (Lumpsump) Rs 5,000
Minimum investment (SIP) Rs 1,000 for 6 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load Nil if redeemed upto 10% in  1 year
Otherwise it would be 1%
Risk High Risk
Max Total expense Ratio (TER) 2.00%
Benchmark CRISIL Hybrid 50+50 Moderate Index
Fund Manager Mr. Prashant Pimple

Download Nippon India Asset Allocator FoF SID

Who can invest in this mutual fund scheme?

Any of the following can invest in this scheme.

1) Resident Individuals

2) Resident Indian Nationals, including partnership forms, companies, Banks, HUFs, Sole Proprietorship etc.,

3) NRI’s

4) Foreign Portfolio Investors

What is the investment objective of this fund?

The primary investment objective of the Scheme is to seek long term capital growth by investing in units of equity oriented schemes, debt oriented schemes and gold ETF of Nippon India Mutual Fund.

However, there is no assurance or guarantee that the investment objective of the Scheme will be realized.

What is the allocation pattern in this mutual fund scheme?

This fund investment pattern is as follows:

Type of instruments Min % Max % Risk Profile
Equity oriented schemes 0% 100% High
Debt oriented schemes 0% 100% Low to medium
Gold ETF 0% 25% Medium to High
Money market instruments & Liquid schemes 0% 5% Low to medium

Why should you invest in such Fund of Funds?

Here are a few reasons to invest in such schemes.

1) This fund of fund would invest in all 3 asset classes up to 100% in equity or debt and up to 25% in gold. Good for diversification.

2) While the debt segment can provide fixed income, equity portion can provide growth in the fund. Gold can be used for asset diversification.

Some risk factors you should consider before investing in such funds

One should consider some of these risk factors / negative factors before investing.

1) Though this scheme looks like multi asset fund, but in reality fund manager, can invest up to 100% in equity or in debt portion.

2) This fund does not provide minimum % of investment for equity or debt or gold. At a times there could be chances that it can invest only in 1 or 2 segments, but not in all 3 segments. This concept may not be appropriate for those who think of investing in such funds for diversification.

3) You can go through all risk factors indicated in the scheme related documents before investing.

How is the Performance of existing Asset Allocator Funds?

Let us check the performance of existing asset allocator funds.

Fund Name 3 Year 5 Year 10 Year
Kotak Asset Allocator Fund 14% 13% 11%
ICICI Prudential Asset Allocator (FOF) Fund 11% 13% 11%
Aditya Birla Sun Life Asset Allocator FoF Scheme 9% 12% 9%
DSP Dynamic Asset Allocation Fund – 9% 10% NA
SBI Multi Asset Allocation Fund 9% 9% 10%
SBI Dynamic Asset Allocation Fund – 8% 9% NA
IDFC Asset Allocation Fund – Aggressive Plan – 5% 9% 9%
IDFC Asset Allocation Fund – Moderate Plan – 6% 9% 9%
IDFC Asset Allocation Fund – Conservative Plan – 7% 8% 9%
Franklin India Dynamic Asset Allocation Fund of Funds 2% 6% 8%

*Annualised returns

Also Read: Top Mutual Fund Portfolio to invest in 2021

Should you invest in the Nippon India Asset Allocator FoF NFO?

This fund of funds scheme would invest in equity schemes, debt schemes and in Gold ETFs. The asset allocation would be done based on the market conditions. This would depend purely on fund manager picking up right allocation during specific market conditions. There are mixed performances in this class of mutual funds. One may give it a try on this new fund. Alternatively, you can invest in some of the top performing asset allocator funds indicated above.

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Categories: New Fund Offers (NFO)
Suresh KP: Suresh KP is the Founder of Myinvestmentideas. He is NISM Certified - Investment Adviser. He has been analyzing financial markets in the last 20 years. He can be reached at suresh@myinvestmentideas.com
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