Mutual Fund NFO: PGIM India Balanced Advantage Fund launched; minimum investment Rs 5000; know last date of offer

PGIM India Mutual Fund announced the launch of ‘PGIM India Balanced Advantage Fund’ today. The NFO will open for subscription on January 15, 2021 and will close on January 29, 2021. The Benchmark Index of the fund is CRISIL Hybrid 50+50 Moderate Index. The scheme aims to provide capital appreciation and income distribution to the investors by dynamically managing the asset allocation between equity and fixed income using equity derivatives strategies, arbitrage opportunities and pure equity investments. The scheme seeks to reduce the volatility by diversifying the assets across equity and fixed income. The Fund will be managed by Aniruddha Naha (for equity investments), Kumaresh Ramakrishnan (for debt and money market investments) and Anandha Padmanabhan (for overseas investments).

The minimum initial investment in the scheme is Rs 5000 and in multiples of Re 1 thereafter. The additional application amount is Rs 1000 and in multiples of Re 1 thereafter. The scheme will follow a tax efficient dynamic asset allocation model as fund is categorized as equity oriented scheme. 65 per cent minimum allocation to equity would be a mix of directional equity and arbitrage.

Speaking on the launch; Ajit Menon, CEO at PGIM India Mutual Fund said, “The Balanced Advantage Fund category is an excellent investment solution for investors. A model based approach helps in automatically rebalancing investments between equity and fixed income in a tax efficient manner without the investor having to keep track herself. The dynamic asset allocation model that the PGIM India Balanced Advantage Fund will follow considers 15 years rolling PE average as the long-term average PE in order to capture changing trends in the equity markets. As markets mature over periods of time, we believe that this feature will keep the model always relevant. This fund is suitable for investors with moderately high-risk appetite. The fund has the potential to deliver consistent long-term risk-adjusted returns & smooth investing experience by dynamically allocating money between equity and fixed income instruments.”

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The portfolio construction process, similar to the fund houses' existing equity funds, will focus on quality with three filters for inclusion in the investment universe – First: operating cash flow positive for 7 out of 10 years, second: demonstrated corporate governance and third: debt to equity ratio less than 3. Any redemptions/switch-outs in excess of 10 per cent of the units allotted (may be redeemed/ switched out to debt schemes without any exit load within 90 days from the date of allotment), would be subject to an exit load of 0.50 per cent, if the units are redeemed/switched-out to debt schemes within 90 days from the date of allotment of units; SIP : Minimum 5 instalments of Rs 1,000 each and in multiples of Re 1 thereafter for Monthly and Quarterly SIP. Minimum SIP Top up amount for Monthly and Quarterly SIP is Rs 100 and in multiples of Re 1.

Smart SIP: It is a complementary feature added to the Systematic Investment Plan, available to eligible investors. A Group Life Insurance cover by a Life insurance company chosen by the AMC, shall provide the Insurance Cover to investors subject to such investor being an Eligible Investor^ under the facility without any extra cost. The premium for providing such life insurance cover shall be borne by the AMC.