Equity-To-Gold-ETF: Bank Of India's New Mutual Fund Scheme Helps You Invest In Diverse Portfolio

Leading PSU lender, Bank of India's Mutual Fund company has recently launched a new fund offer that helps investors diversify their portfolio into three categories equity, debt, and gold ETFs. The new scheme is called as Bank of India Multi Asset Allocation Fund, and its NFO opened for subscription on February 07, 2024 and will close on February 21, 2024.

Bank of India Multi Asset Allocation Fund is for investors looking to invest in three asset classes (Equity, Debt & Gold). The Multi Asset Allocation Strategy comprises of Equity & Equity Related Instruments- 35% to 40%, Debt and Money Market instruments- 45% to 55%, Gold ETF- 10% to 15% and Units issued by REITs and InvITs- 0% to 10%.

Mohit Bhatia, CEO, of Bank of India Investment Managers Private Limited (Investment Manager for Bank of India Mutual Fund) added that "the AMC has exhibited competence in the construct and management of asset allocation and rules-based hybrid products. The Multi Asset Allocation Fund is a further addition to this bouquet for the benefit of our existing and potential investors, who are looking at a portfolio mix that predominantly focuses on stability through majority debt allocation while growth & inflation hedges are achieved vide secondary allocations in equity & gold.

Bhatia added, "Further investors also have an added benefit of indexation on Long-term capital gains (after a suitable holding period of over 3 years as per current tax regulations)."

Also, Alok Singh, CIO, of Bank of India Investment Managers Private Limited further added that the fund will have exposure to Equity & Equity Related Instruments in the 35%-40% range, Debt & Money Market Instruments exposure will be in the 45%-55% range and Gold exposure through ETF will be in the 10%-15% range. The fund also can invest up to 10% in listed REITs and INVITs. The low correlation between debt and equity allows the portfolio to balance the volatility associated with the individual asset class. The exposure to gold further helps in managing the portfolio volatility."

The scheme's investment objective is to seek long-term capital growth by predominantly investing in equity and equity-related securities, debt & money market instruments and Gold ETF. However, there can be no assurance that the investment objectives of the Scheme will be realized. The Scheme does not guarantee/ indicate any returns.

Further, the is suitable for investors who are seeking low volatility in their portfolio and exposure to multiple asset classes with better returns. Also, investors may consider this fund as part of their allotment of emergency or contingency plans, due to the diverse nature of the fund. Notably, the low volatility of the portfolio increases the propensity of investors to hold on to their investments for long periods, which in turn results in better accretion because of the compounding effect.

Benefits of investing in the Bank of India Multi Asset Allocation Fund:

- Allocation in three asset classes: Equity, Debt, Gold
- Invests with a minimum allocation of at least 10% each in all three asset classes
- Portfolio building using a combination of top-down and bottom-up approach
- Exposure to a mix of stocks, bonds, and REITs & Invits
- Taxation - offers indexation benefit

Bank of India Investment Managers Private Limited (Formerly BOI Star Investment Managers Private Limited) (Formerly BOI AXA Investment Managers Private Limited) is a wholly-owned subsidiary of Bank of India. Bank of India Investment Managers Pvt. Ltd. has continuously proved to be trustworthy with 15 years of rich experience in fund management and has always catered to the needs of the investors across various objectives, thus leading to a portfolio of 18 varied Mutual Fund Schemes with 3.4 lakhs+ investors and ₹ 6280.13 crores assets under management (as on January 2024) and 12 branches across PAN India as on January 31, 2024.