Canara Robeco Mutual Fund has introduced a new Multi Asset Allocation Fund.
The goal of this fund is to deliver alpha returns (returns above the market average) during bullish market conditions, while also protecting investors’ money during market downturns.
The fund will invest in a variety of assets, including equity (stocks), debt instruments, and gold and silver ETFs.
Investment Strategy of the Multi Asset Allocation Fund
This fund will have the flexibility to adjust its investments in different asset classes based on market conditions. This approach helps protect investors during market falls.
Equity (Stocks): The fund will allocate 65-80% of its capital in equities and related instruments.
Gold and Silver ETFs: Around 10-25% will be invested in gold and silver ETFs.
Debt and Money Market: The fund will invest 10-26% in debt and money market instruments.
REITs and InvITs: These types of investments will also be considered.
Adjusting Equity Investments According to Market Conditions
According to Shridatta Bhandwalder, Head of Equity at Canara Robeco, the fund will adjust its equity allocation based on internal research.
Factors like economic conditions, earnings, and valuations will determine how much the fund invests in stocks.
When market conditions are favorable, the fund may increase its equity allocation up to 80% to boost returns.
However, when market conditions are not ideal, the fund will reduce its equity allocation to minimize potential losses.
The stock selection for the fund will focus on companies that are leaders in their industries or have consistently performed well across different market conditions.
While stock selection isn’t the main focus, diversification will ensure a balanced portfolio.
Should You Invest?
The Multi Asset Allocation Fund invests across various asset classes, with 26 such funds already available in the market.
While this type of fund aims to reduce losses during market downturns, it’s important to note that it still carries risk.
Before deciding to invest, consider factors like:
Your risk tolerance
The investment horizon
Tax implications.
