WhiteOak Capital Multi Asset Allocation Fund NFO – Should you invest?

WhiteOak Capital mutual funds has launched Multi Asset Fund NFO that opens for subscription on 3rd May, 2023.  This mutual funds would invest in investment classes like equity, debt, gold and silver. Some experts say good for diversification, while others say just avoid them. Should you invest in WhiteOak Capital Multi Asset Allocation Fund NFO? What are the various risk factors associated with such funds?

Also Read: Which is the worst performing mutual fund in last 1 year to 10 years?

WhiteOak Capital Multi Asset Allocation Fund (NFO) – Issue Details

Scheme Opens 03-May-23
Scheme Closes 10-May-23
Scheme reopens for continuous purchase/sale Within 5 business days
Minimum Lumpsum Rs 500
Minimum SIP Rs 500 for 6 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load Nil
Risk Very High Risk
Benchmark CRISIL Composite Bond Index (40), S&P BSE 500 TRI (40), Domestic Price of Gold (10), Domestic Price of Silver (10)
Fund Manager Ramesh Mantri
Piyush Baranwal
Max TER 2.00%

WhiteOak Capital Multi Asset Allocation Fund SID

What is the investment objective of this MF scheme?

The investment objective of the Scheme is to provide long term capital appreciation and generate income by investing in instruments across multiple asset classes viz. Equity, Debt and Gold/silver related instruments.

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?

This fund investment pattern is as follows:

Type of instruments Min % Max % Risk Profile
Equity and Equity Related Instruments 10% 80% High
Debt Securities and Money Market Instruments 10% 80% Low to Medium
Gold/silver related instruments (including
ETFs, Sovereign gold deposit schemes)
&Exchange Traded Commodity Derivatives
(ETCDs) as permitted by SEBI from time to
10% 50% Medium to High
Units issued by REITs & INvITs 0% 10% Low to Medium

How such asset class has performed individually?

Here is how the performance of equity, debt gold in the last 10 years against model portfolio for understanding how such asset class performed.

asset class has performed individually

Why to invest in the WhiteOak Capital Multi Asset Allocation Fund?

Here are a few reasons to invest in such mutual fund schemes.

1) Diversification: Multi-asset mutual funds invest in a variety of asset classes, such as stocks, bonds, and alternative investments. This diversification helps spread risk and can provide a more stable return.

2) Flexibility: Multi-asset mutual funds are designed to adapt to changing market conditions. The fund managers have the flexibility to shift investments between asset classes based on their outlook for the economy and financial markets.

3) Convenience: Investing in a multi-asset mutual fund is a convenient way to gain exposure to a variety of asset classes. Investors can easily buy and sell shares of the fund through a brokerage account.

4) Lower Costs: Compared to investing in individual stocks and bonds, multi-asset mutual funds can be more cost-effective. They typically have lower fees and expenses than actively managed funds, and investors can benefit from economies of scale when the fund grows in size.

5) Prediction: It is difficult to predict whether gold or silver would outperform or equity would outperform in the long run. If you are one among such investor who is in a dilemma, you can invest in such funds.

Some key risk factors you should consider before you invest in such funds

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

1) Limited Control: Investors who choose to invest in a multi-asset mutual fund give up control over individual investment decisions. Fund managers make all investment decisions, and investors must trust their judgment.

2) Fund Fees: Multi-asset mutual funds can come with higher fees and expenses than passively managed index funds. These fees can eat into investment returns over time.

3) Fund Performance: The performance of a multi-asset mutual fund may not meet investor expectations. While diversification can help reduce risk, it may also limit the fund’s upside potential.

4) Tax Implications: Investing in a multi-asset mutual fund may have tax implications. Investors may be subject to capital gains taxes if the fund manager sells investments within the fund for a profit, even if the investor does not sell their shares.

5) Market Risk: Multi-asset mutual funds are still subject to market risk, and the value of the fund may fluctuate based on economic and market conditions. Investors must be prepared for potential losses in addition to potential gains.

6) Equity high risk: Investing in equity is high risk and there is no guaranteed returns. As an example, Indian markets have generated almost zero returns in the last 1.5 years.

7) You can refer complete risk factors of investing in this particular scheme in SID / KIM / NFO prospectus.

Also read: Top rated mutual funds from Valueresearch in 2023

WhiteOak Capital Multi Asset Allocation Fund NFO – Should you invest?

WhiteOak Capital Multi Asset Allocation Fund invests in multi asset class, i.e. equity, debt, gold and Silver. This combination has underperformed in the short term, however generated moderate to high returns in the medium to long term. Such funds are good for portfolio diversification.

On other hand, such funds offer limited control to play with various asset classes. Such funds underperform in the short to medium term, hence don’t invest if you are are not long term investor.

High risk investors who understand the pros and cons and invest in such multi asset mutual funds.

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Suresh KP

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