WHY TO INVEST IN DUAL ADVANTAGE FUND

In our pursuit to invest our hard-earned money, we are often faced with an investment dilemma that forces us to choose between income and growth. Mutual Fund understands this need and bring us a unique fund, Dual Advantage Fund.

The fund is suitable for:

1. Investors with low to medium risk appetite

2. High net worth individuals

3. First time mutual fund investors who would like to enjoy the debt returns with an additional equity upside

4. An investor who is looking for income as well as capital appreciation

What is Dual Advantage Fund?

Dual Advantage Fund is a predefined term Days and close-ended hybrid scheme. The primary investment objective of the scheme is to generate income by investing in a portfolio of fixed income securities maturing on or before the maturity of the scheme. The secondary objective is to generate capital appreciation by investing a portion of the scheme corpus in equity & equity related instruments. However, there can be no assurance that the investment objective of the Scheme will be realized.

Investment Opportunity:

A Hybrid Scheme like Dual Advantage Fund endeavours to combine the benefits of different asset classes, viz. Equity & Debt. A hybrid scheme endeavours to reduce the volatility of equity asset class (Ex. CNX Nifty Index) and low return of debt asset class (Ex. CRISIL composite Bond Fund Index) which can be seen in the graph, showing the daily three-year rolling returns of CNX NIFTY Index, CRISIL Composite Bond Fund Index & CRISIL MIP Blended Index.

The Plan offers Regular Option and Direct Option:

Regular Option: This Option is for investors who wish to route their investment through any distributor.

Direct Option: This Option is for investors who wish to invest directly without routing the investment through any distributor. This Option shall have a lower expense ratio excluding distribution expenses, commission, etc and no commission for distribution of Units will be paid / charged under the Direct Option.

The Regular and Direct Options offer the following sub-options:

Growth option

Dividend option: Dividend Option offers Dividend Payout facility only.

Minimum Application Amount: Rs. 5,000/- and in Multiples of Rs. 1 thereafter

Exchange Listing: Units of the scheme will be listed on NSE Ltd.

Asset Allocation:

Debt & debt related instruments* 55% 95% Low to Medium

Money market instruments 0% 10% Low to Medium

Equity and equity related instruments 5% 35% High

including derivatives

Exposure to domestic securitized debt may be to the extent of 40% of the net assets. The Scheme shall not invest in ADR/ GDR/ foreign securities / foreign securitized debt. Exposure to derivatives may be to the extent of 30% of the net assets. The Scheme shall invest in repo including repo in corporate debt. The scheme may engage in stock lending.The scheme shall not engage in short selling.

Read also: Basics of Mutual Funds

The cumulative gross exposure through equity, debt and derivative position will not exceed 100% of the net assets of the scheme.

Fixed Income / Debt Investments:

1. Investments in securities, maturing on or before the date of the maturity of the Scheme

2 Flexibility to invest in the entire range of debt instruments

3. Investment in AA or above-rated securities

4. Targeted investment in fixed income / debt securities between 83% and 95%

Equity & Equity-related instruments:

1. Invest in diversified portfolio of Equity & Equity-related instruments

2. Mix of bottom-up & top-down approach for stock-picking

3. Primarily focus on companies that have demonstrated characteristics such as market leadership, strong financials and quality management

4. Targeted investment in Equity & Equity-related instruments between 5% and 17%