Mirae Asset is launching its Multi Asset Fund as part of its endeavour to expand its product suite to offer solutions that investors are looking for. With gold offering negative correlation to equities, a judicious combination of equity, debt and gold can offer superior risk adjusted returns to investors and make their overall investment experience smoother.
A combination of 65% equity, 15% gold and 20% debt has historically provided returns in the range of 10%-16% about 70% of the time.
In this fund, net equity exposure will range between 40% - 75% (although gross will be maintained above 65% through arbitrage exposure to get equity taxation). Net equity will be influenced by a model that considers price/book and earnings yield/bond yield.
Initial portfolio will likely have 55% net equity, 10% fully hedged arbitrage, 13% gold and balance in debt.
The fund mandate allows the manager to add other commodities like silver as well as REITs/InvITs and foreign equity. However, initial portfolio is unlikely to feature any of these.
Equity exposure will be large cap focused, to align with investor expectations of smoother investment journeys from this fund category.