ICICI Pru has launched its iSIF Active Asset Allocator Long Short Fund which allows the manager more flexibility across asset classes as well as access to a broader range of derivative strategies as compared to multi asset allocation mutual fund schemes.
Equity allocation can be between 30-80% and there is nominimum allocation required for commodities, even as the range of commodities is quite wide including gold, silver, oil, copper and aluminum.
There is no need to resort to arbitrage allocations to fulfil any gross equity thresholds – which means debt allocations can be more optimally deployed.
Ihab says the primary goal of this new SIF is to provide investors a multi asset allocation solution with lower volatility than a typical MAAF.
Derivative strategies will focus more on reducing drawdowns in corrective market phases and relatively less on trying to gun for more alpha in market upswings, as that would increase the risk profile of the solution.
Current asset allocation is expected to be evenly divided between equity and debt with likely small allocations to commodities and InvITs. Views on commodities tend to be dynamic and therefore expect nimble moves in this space from this new product.
He says HNI investors who are looking for participation across asset classes with lower volatility should consider the new iSIF Active Asset Allocator SIF while those who want multi asset exposure but with potentially higher upside during market rallies albeit with higher volatility, can prefer the fund house’s MAAF mutual fund solution.