NFO Update: Canara Robeco launches Canara Robeco Balanced Advantage Fund

New Fund Offer to open on July 12 and close on July 26, 2024

Canara Robeco Mutual Fund, India’s second oldest asset manager, announced the launch of Canara Robeco Balanced Advantage Fund, an open-ended dynamic asset allocation fund aiming to generate alpha when markets are doing well and reduce downside risk in times of bad market periods. The NFO will open on July 12, 2024, and close on July 26, 2024.

The gross allocation of the fund will be 65 per cent or more towards equities, which will ensure equity taxation for investors. Rest will be invested in debt and money market instruments. It also aims to address the investor behavioural gap due to market volatility.

"Canara Robeco Balanced Advantage Fund will dynamically alter the exposure to equities and debt aiming for long term capital appreciation with income generation. The fund may be suitable for mutual fund investors seeking a method for dynamically altering their exposure to equity. The fund may also be suitable for those investors who are trying to moderate their participation in market rallies while mitigating potential losses," said Mr. Rajnish Narula, CEO, Canara Robeco Mutual Fund.

The asset allocation in the fund will be guided by a proprietary three-factor asset allocation model that has been back-tested over more than 20-year period.

"Canara Robeco Balanced Advantage Fund is an asset allocation product which will dynamically allocate equity based on in-house model, to eliminate investor biases.  The proprietary model uses Trailing P/B’, ‘Equity Risk Premium’ and ‘Forward P/E’ to set asset allocation formulae in different market conditions”, said Mr. Shridatta Bhandwaldar, Head – Equities at Canara Robeco Mutual Fund.

When selecting equity investments, the fund will be using top-down approach for sector allocation and bottom-up selection for stocks -- which will be a blend of compounders and cyclicals. In its allocation to debt segment, the fund will predominantly invest in government bonds and AAA-rated corporate papers with an aim to maintain stability and liquidity. The debt portfolio will be managed dynamically to capture any mispricing across yield curves.

“Canara Robeco balance Advantage Fund’s dynamic Asset allocation strategy provides Investors an opportunity to dynamically allocate between equity & debt. This NFO also offers 2 special features – Auto Switch which allow investors to invest in select debt schemes during the NFO period wherein the entire amount is switched to the NFO on the last day of NFO. Also, investors who are looking at staggered investment in NFO can invest through 4 equal investments in staggered manner through Smart STP. This category of fund is also emerging as a solution to the investors that may meet their cash flow requirements”, said Mr. Gaurav Goyal, National Head Sales and Marketing, Canara Robeco Mutual Fund.

The Canara Robeco Balanced Advantage Fund will be benchmarked against CRISIL Hybrid 50+50 – Moderate Index.

Mr. Shridatta Bhandwaldar, Ms. Ennette Fernandes, Ms. Suman Prasad and Mr. Amit Kadam are the fund managers for Canara Robeco Balanced Advantage Fund.

Disclaimer: The article is for informational purposes only and not investment advice.