DSP BlackRock MF launches Dynamic Asset Allocation Fund

New Fund Offer opens on January 17, 2014; closes on January 31, 2014

January 15, 2014 3:33 IST | India Infoline News Service
DSP BlackRock Investment Managers Pvt. Ltd., one of the premier asset management companies in India, today announced the launch of the DSP BlackRock Dynamic Asset Allocation Fund (DAAF). This first-of-its-kind open ended fund of funds scheme will dynamically manage the asset allocation between the specified equity mutual funds schemes and debt mutual funds schemes of DSP BlackRock Mutual Fund, based on the relative valuation of equity and debt markets. The key value proposition of the scheme is to provide an asset allocation overlay to investors. The scheme will invest in specified underlying schemes of DSP BlackRock Mutual Fund which have a long-term performance track record.
The scheme has an active approach of achieving tactical asset allocation based on the relative attractiveness of equity and debt markets. The automatic rebalancing of portfolios not only aims for better returns but also seeks to limit downside for investors during market downturns. The scheme uses the Yield Gap metric to assess market valuations. In essence, the scheme would be suitable for investors looking at long-term wealth creation.
The factor that would be used for determining the asset allocation is the Yield Gap ratio, which is the ratio of debt market yield to equity market yield. 10Y G-Sec yield is used as the proxy for debt market yield, while earnings yield of equity markets is simply the reciprocal of the Nifty Price/Earnings ratio. By evaluating the ratio of these two yields, one can assess whether equity markets are overpriced or underpriced relative to debt markets. The model also considers the Modified Yield Gap ratio, which uses 1Y G-Sec yield in the numerator.
Speaking on the occasion, S. Naganath, President & CIO, DSP BlackRock Investment Managers Pvt. Ltd. said, “Asset allocation is a key ingredient in driving portfolio performance. There is a need for a product that offers asset allocation on a dynamic basis. In this context, the DSP BlackRock Dynamic Asset Allocation Fund could be an interesting investment opportunity for investors.”
“Investing today is challenging for many investors as they can get confused by market volatility. Timing the markets can be challenging even for seasoned investors. DAAF resets asset allocation automatically and therefore seeks to eliminate confusion and hesitation about timing the market,” said Pankaj Sharma, Executive VP, Head of Business Development & Risk Management, DSP BlackRock Investment Managers Pvt. Ltd.
The Scheme would be investing primarily in DSP BlackRock Top 100 Equity Fund and DSP BlackRock Equity Fund to get equity exposure and DSP BlackRock Strategic Bond Fund and DSP BlackRock Short Term Fund to get debt exposure. Further, the Scheme has a provision to invest in DSP BlackRock Focus 25 Fund and/or DSP BlackRock Opportunities Fund and/or DSP BlackRock India T.I.G.E.R Fund (The Infrastructure Growth and Economic Reforms Fund), equity schemes of DSP BlackRock Mutual Fund and/or DSP BlackRock Money Manager Fund and/or DSP BlackRock Banking & PSU Debt Fund and/or DSP BlackRock Income Opportunities Fund debt schemes of DSP BlackRock Mutual Fund.
DAAF will be managed by Mr. Apoorva Shah and Mr. Dhawal Dalal. DAAF will be open for initial subscription from January 17, 2014 until January 31, 2014. Thereafter, DAAF will be open for ongoing subscription at the prevailing NAV.

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