Union Mutual Fund Files Draft with SEBI for New Multi Asset Allocation Fund

Union Mutual Fund has filed a draft with the market regulator SEBI for a new Multi Asset Allocation Fund. Let’s dive into the details of this offering and understand its potential impact on investors.

Understanding Union Mutual Fund

Union Mutual Fund is sponsored by Union Bank of India and Dai-ichi Life Holdings, Inc. This backing provides a solid foundation for its investment products, offering a blend of domestic and international expertise.

Details of the Multi Asset Allocation Fund

The Union Multi Asset Allocation Fund is an open-ended scheme designed to invest in a mix of equity, debt, gold, and/or silver. This diversified approach aims to balance risk and reward, making it suitable for investors looking for long-term wealth creation.

Investment Strategy

The fund will allocate investments across:

• Equity and equity-related instruments
• Debt and money market instruments
• Units of Gold ETFs and/or Silver ETFs

This diversified portfolio approach seeks to optimize returns while managing risk.

Plans Offered

The scheme offers two plans under a common portfolio:

• Direct Plan

The Direct Plan is exclusively for investors who purchase or subscribe to units directly with Union Mutual Fund. It is not available for those who route their investments through a distributor. This plan typically has a lower expense ratio compared to the Regular Plan, as it excludes distribution expenses and commissions.

• Regular Plan

The Regular Plan is available for investors who purchase or subscribe to units through a distributor. This plan includes distribution expenses and commissions, resulting in a slightly higher expense ratio than the Direct Plan.

Investment Options

Each plan under the Union Multi Asset Allocation Fund offers two investment options:

Growth Option

This option is tailored for investors seeking capital appreciation and not interested in regular income distributions.

Income Distribution cum Capital Withdrawal (IDCW) Option

This option is designed for investors seeking income through IDCW declared by the scheme. The frequency and amount of IDCW will depend on the availability of distributable surplus.

Minimum Investment Amounts

The fund has set the following minimum application amounts:

Initial investment: Rs 1,000 and multiples of Re. 1 thereafter.

Systematic Investment Plan (SIP):

•  Daily frequency: Rs 100 and multiples of Re 1 thereafter.
•  Weekly frequency: Rs 500 and multiples of Re 1 thereafter.
•  Fortnightly frequency: Rs 500 and multiples of Rs 1 thereafter.
•  Monthly frequency: Rs 500 and multiples of Rs 1 thereafter.
• Subsequent investments: Rs 1,000 and multiples of Rs 1 thereafter.

Benchmark and Fund Managers

The performance of the Union Multi Asset Allocation Fund will be benchmarked against a composite index:

• 65% Nifty 50 TRI
• 20% CRISIL Short Term Bond Fund Index
• 15% Domestic price of Gold

The fund will be managed by a team of experienced fund managers: Mr. Hardick Bora, Mr. Sanjay Bembalkar, and Mr. Anindya Sarkar (Fund Manager – Fixed Income).

Conclusion

Union Mutual Fund’s Multi Asset Allocation Fund offers a diversified investment approach, suitable for investors looking to balance risk and achieve long-term growth. With a variety of plans and options, investors can choose the one that best fits their financial goals and investment strategies.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions