Fund allows investment in liquid, debt, equity funds and gold ETFs
ING Investment Management India, the investment manager of ING Mutual Fund, is launching its ING Optimix Financial Planning Fund (an openended fund of funds scheme) that will invest across funds from different asset management companies. The company, which has offered multimanager funds since 2006, said the scheme would allow investors to invest in four different fund classes -liquid funds, debt funds, equity funds and gold ETFs, a first time in India.
As of now, there are around 30 fund of funds schemes available in the country which offers exposure to investors in equity, debt and gold asset classes but none of them allow exposure to all categories simultaneously. ING Mutual Fund is targeting retail investors for this scheme.
The new fund offer is offering four risk profiles-cautious, conservative, prudent and aggressive-with each offering a different mix of asset classes.
For example, the cautious plan will allocate 6377 per cent of investor money in liquid and money market funds, 2337 per cent in other types of debt funds and 0-14 per cent in money market securities. On the other hand, the aggressive plan will allocate 63-77 per cent investor money in equity funds, 13.5-23.75 per cent in money market funds, 9-19.25 per cent in other type of debt funds (excluding liquid and money market funds), 4.25-14.5 per cent in gold ETFs and 0-10.25 per cent in money market securities. The fund offers investors exposure to gold as an asset class in three of the risk-profiles (except cautious). Investors need to choose from thousands of funds, closely track their performance, take decisions to retain or change funds, attract tax liability if funds are changed before 12 months and finally, reconcile all these holdings at the end of the year.
These are real concerns of investors today... ING has been offering Multi Manager funds in India since 2006 and already manages close to Rs 347 crore from a wide base of nearly 30,000 investors.
Like other fund of fund schemes, this scheme will also enjoy a tax benefit which is not normally available to retail investors. If an investor were to put money into top-performing schemes and exit/entry before 12 months, he would incur short-term capital gain tax due to his/her transactions.
However, fund manager are allowed to exit and entry schemes but not incur any short-term capital gain taxes.
"The product is an excellent way to start for first time mutual fund investors just as it is for those who are actively investing in mutual funds," said Arvind Bansal, vice-president and head of multi manager investment, ING Investment Management India.
The units under the scheme can be held in physical and demat mode.
The minimum investment is Rs 5,000. The exit load structure varies with cautious plan attracting loads for redemptions after six months (from date of allotment of units), conservative plan investors liable to pay load after one year, prudent as well as aggressive plan investors are required to pay exit load after three years.
