The new Invesco India MAAF will have active allocations across domestic and global equities, precious metals and domestic debt. What sets this AA mix apart is the material weights for global equities and precious metals (gold and silver), which gives it a much broader multi asset coverage than most.
Global equities can range between 10-35% and is likely to be around 20-21% in the initial portfolio. Global equity will currently be US focused. Precious metals can also range between 10-25% and will likely be around 20-21% in the initial portfolio.
Domestic equity will range from 35-65%, with 35% being retained at all times to provide a tax efficient product structure where investors can avail LTCG tax (currently at 12.5%) for holding periods beyond 2 years. The initial portfolio will likely have around 40% in domestic equity –at the lower end of the range – signaling near term market concerns.
Domestic equity will currently be large cap tilted with some midcaps and likely no small cap presence.
Domestic debt will be the residual allocation, which means the initial portfolio will likely be 40 (domestic equity), 20 (global equity), 20 (precious metals) and 20 domestic debt.
Equity allocation will be determined by scores that come out of a 5 factor model while precious metals will be driven by a separate 4factor model.
Taher says this new MAAF will be true-to-label in terms of offering genuine breadth of asset classes with material weights where warranted, with each asset class being actively managed to give investors the dynamism they expect from MAAFs.