PRAMERICA Mutual Fund has introduced its open ended dynamic asset offering — Pramerica Dynamic Fund — using a proprietary tool, Pramerica Dynamic Asset Rebalancing Tool (Pramerica Dart). The scheme will invest in debt and equity instruments. The allocation to equity and debt will be determined by Pramerica Dart.
The tool takes into account three key factors that influence the markets – fundamentals, volatility and liquidity and comes out with a score that tells how much of equity should be held in the portfolio. This can range from 100-30% in equity depending on market valuations. Fund managers will actively manage the portfolio within the limits prescribed by the model.
The fund aims to achieve long-term capital appreciation by investing in an actively-managed diversified portfolio comprising equity and debt instruments.
The fund will invest 30-100% in equity and the fixed income exposure is capped at 70% of the assets. The fund benchmark comprises 50% of Nifty and 50% of Crisil MIP Index.
The fund will be managed by Ravi Gopalakrishnan and Mahendra Jajoo. There is no entry load. To curb traffic, there is an exit load of 1% if you decide to redeem before completing one year in the scheme after allotment of units. NFO closes on December 3, 2010 before it reopens on December 13, 2010.
WHY INVEST?
To enjoy equity comparable returns at reduced volatility
WHY NOT TO INVEST?
Model-driven approach may curb the return upside if markets remain in a high valuations zone for long period of time.
