PGIM India Mutual Fund launches ‘PGIM India Balanced Advantage Fund’

by Suman Gupta

NFO opens on January 15, 2021 and closes on January 29, 2021

Highlights:

• PGIM India BAF is an open-ended dynamic asset allocation fund with a floor of minimum 30% equity

• This product is suitable for investors who are seeking capital appreciation over a long period of time

• Endeavours to deliver reasonable downside protection and lower volatility

• Asset allocation decided by the model based on time tested DAAAF model to help “buy low and sell high”

• Dynamic model that considers 15 years rolling PE* average considered as the long term average PE* in order to capture changing trends in the equity markets. So the model always remains relevant compared to static asset allocation models. (*PE variation is defined as the deviation of trailing PE of Nifty 50 Index ( observed on a 20 days moving average basis) from 15 year rolling average PE of Nifty 50 Index.

Mumbai, January, 2021: PGIM India Mutual Fund announced the launch of ‘PGIM India Balanced Advantage Fund’. The NFO will open for subscription on January 15, 2021 and will close on January 29, 2021. The Benchmark Index of the fund is CRISIL Hybrid 50+50 Moderate Index. The scheme aims to provide capital appreciation and income distribution to the investors by dynamically managing the asset allocation between equity and fixed income using equity derivatives strategies, arbitrage opportunities and pure equity investments. The scheme seeks to reduce the volatility by diversifying the assets across equity and fixed income. The Fund will be managed by Mr. Aniruddha Naha (for equity investments), Mr. Kumaresh Ramakrishnan (for debt and money market investments) and Mr. Anandha Padmanabhan (for overseas investments).

“The Balanced Advantage Fund category is an excellent investment solution for investors. A model based approach helps in automatically rebalancing investments between equity and fixed income in a tax efficient manner without the investor having to keep track herself. The dynamic asset allocation model that the PGIM India Balanced Advantage Fund will follow considers 15 years rolling PE average as the long-term average PE in order to capture changing trends in the equity markets. As markets mature over periods of time, we believe that this feature will keep the model always relevant. This fund is suitable for investors with moderately high-risk appetite. The fund has the potential to deliver consistent long-term risk-adjusted returns & smooth investing experience by dynamically allocating money between equity and fixed income instruments” said Mr. Ajit Menon – CEO, PGIM India Mutual Fund.

The minimum initial investment in the scheme is Rs. 5000/- and in multiples of Re. Re1/- thereafter. The additional application amount is Rs. 1000/- and in multiples of Re. 1/- thereafter. The scheme will follow a tax efficient dynamic asset allocation model as fund is categorized as equity oriented scheme. 65% minimum allocation to equity would be a mix of directional equity and arbitrage.

The portfolio construction process, similar to our existing equity funds, will focus on quality with three filters for inclusion in the investment universe – First: operating cash flow positive for 7 out of 10 years, second: demonstrated corporate governance and third: debt to equity ratio < 3. Any redemptions/switch-outs in excess of 10% of the units allotted (may be redeemed/ switched out to debt schemes without any exit load within 90 days from the date of allotment), would be subject to an exit load of 0.50%, if the units are redeemed/switched-out to debt schemes within 90 days from the date of allotment of units; SIP : Minimum 5 instalments of Rs. 1,000/- each and in multiples of Re. 1/- thereafter for Monthly and Quarterly SIP. Minimum SIP Top up amount for Monthly and Quarterly SIP is Rs. 100/- and in multiples of Re. 1/-. Smart SIP: It is a complimentary feature added to the Systematic Investment Plan, available to eligible investors. A Group Life Insurance cover by a Life insurance company chosen by the AMC, shall provide the Insurance Cover to investors subject to such investor being an Eligible Investor^ under the facility without any extra cost. The premium for providing such life insurance cover shall be borne by the AMC.

About PGIM India Mutual Fund: PGIM India Mutual Fund is a wholly owned business of PGIM, the global investment management business of the US based Prudential Financial, Inc. (PFI). PGIM India Asset Management is the full service investment manager of PGIM India Mutual Fund, offering a broad range of equity and fixed income solutions to retail and institutional investors throughout the country. We manage 20 open-ended funds operated by 17 investment professionals. In addition to managing our investors assets through domestic Mutual Funds, we also offer Offshore Funds and Portfolio Management Services. The fund house leverages the strength and stability of PGIM’s 140-year legacy to build on its decade long history in India.

Headquartered in Mumbai, PGIM India Mutual Fund has a presence in 27 cities across the country including branches in Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Pune. PGIM India Mutual Fund brings a rich blend of global resources, intellectual acumen and local investment expertise and is committed to designing superior and meaningful, wealth-building solutions for our investors. PGIM India provides unique training and educational programs for building exceptional capabilities and best business practices for its business associates. For more information, please visit http://www.pgimindiamf.com/

PGIM: With 16 consecutive years of positive third-party institutional net flows, PGIM, the global asset management business of Prudential Financial, Inc. (NYSE: PRU), ranks among the top 10 largest asset managers in the world* with more than US$1.4 trillion in assets under management as of 30 June 2020. With offices in 15 countries, PGIM’s businesses offer a range of investment solutions for retail and institutional investors around the world across a broad range of asset classes, including public fixed income, private fixed income, fundamental equity, quantitative equity, real estate and alternatives. PGIM manages 79 of the largest 100 US pension funds and 162 of the largest 300 global pension funds.  For more information about PGIM, visit pgim.com.

Prudential Financial, Inc. (PFI) of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. For more information please visit news.prudential.com