Investment can be paralyzing if not kept in check with numerous alternatives available to choose from. Among them is the Kotak Multi Asset Allocation Fund Regular Plan – Growth. It was launched on September 22, 2023, and offers a diversified approach in investing by spreading funds across a variety of asset classes.
What is Kotak Multi Asset Allocation fund? What does it intend to do? What are its objectives, how it’s going to invest, whether it has tax implications, and where does it stand in terms of being the right option for you? Well, all that and more is answered in this blog on what the Kotak Multi Asset Allocation Fund really is.
What is the Kotak Multi Asset Allocation Fund?
It is Kotak Mahindra Mutual Fund that manages an open-ended hybrid mutual fund that goes by the name Kotak Multi Asset Allocation Fund. This fund has its principal objective of offering long-term capital appreciation. That is to say that the fund has been put together to increase your money, rather than providing income immediately.
Key Features of Kotak Multi Asset Allocation Fund
1. Diversified Portfolio The fund makes an investment in asset classes, namely
- Equities: shares in firms that can significantly rise in value.
- Debt Instruments: Bonds which are stable and fixed returns.
- Money Market Instruments: Investments that are relatively short-term and low-risk.
- Commodity ETFs: They invest in real commodities like silver.
2. Benchmark:
The fund is benchmarked against the domestic price of silver. This essentially means its performance compared to how silver is doing in the market gives the investors a reference frame.
Investment Objective
The main objective of the Kotak Multi Asset Allocation Fund is that of long-term capital appreciation. The fund should be balanced in terms of growth potential through equities and stability through debt instruments so that investments can be approached in a balanced manner.
How Does Asset Allocation Work?
Asset allocation forms an intrinsic part of any investment plan. The Kotak fund allocates its investments in the following manner:
• 56.31% in Equities:
The largest chunk, yet again, is equities for high growth potential. Investments in stocks can form a highly potent and sticky kind of money since it means gains down the line when the stakes are properly played. However, with high risk comes high reward.
• 10.58% in Debt Instruments:
Bonds and other instruments of debt stabilize the money in the portfolio. They are less likely to attract greater returns than equities but probably offer more stability and safety from market volatility.
•15.22% Cash and Cash Equivalents:
Maintaining cash or highly liquid instruments ensures their ready availability for immediate outlays or as opportunities arise for investing.
This approach of diversifying would make the fund bring in good returns while keeping risk at bay.
Why people Invest in Kotak Multi Asset Allocation Fund?
1. Growth Along with Stability
The first advantage of this Kotak Multi Asset Allocation Fund is balanced investment. Because the fund invests in equities as well as debt, it would provide growth along with minimizing the risk involved. This, in turn, makes it suit investors varying from very conservative to an aggressive level.
2. Flexible investment strategy
There will be flexibility in asset allocation for the fund, enabling it to respond to changes in the market environment. For instance, at times when the equities are at a good time, the funds can take more exposure to equity markets in order to capture the growth. Conversely, during periods when the markets get very turbulent, it shifts to safer investments to conserve capital.
3. Tax Efficiency
Tax implications are crucial to every investor. The Kotak Multi Asset Allocation Fund adheres to specific tax treatments as indicated by the equity allocations.
- The fund invests 65% or more in equities:
- Income earned and capital gain earned when sold within one year will be charged at 15 percent. Income earned and capital gain earned after a year will be tax-free up to Rs. 1 lakh, and it will attract a 10 percent tax for earning above that amount.
- In case 35-65% equity is envisaged: The profits are taxed under the respective income tax slab during withdrawal or redemption period within three years. However, after the completion of three years, the profits are taxed at the rate of 20% after indexation benefits.
- In case less than 35% equity is envisaged: All profits are taxed according to your applicable income tax slab.
- Profits by way of Dividends: It follows the taxation rate as applicable under the income tax slab for your profile. TDS will be applicable for dividends up to Rs. 5,000.
4. Professional Management
All this makes Kotak Mahindra Mutual Fund as much of a safe investment avenue for investors. The fund managers at Kotak are well-experienced professionals and monitor market trends regularly to ensure adjustments in the portfolio to maximize returns.
Whom to invest with?
The Kotak Multi Asset Allocation Fund is apt for different investors.
A long-term investor will benefit well with this fund, if one needs to grow wealth over the long run and is tolerant of some market fluctuations. For a new investor, the diversified nature of the fund provides more balanced entry into the market.
Risk-averse Investors: If you want a stable investment but need some growth exposure, this portfolio of equities and debt might just do the trick.
How to Invest in Kotak Multi Asset Allocation Fund
Invest in Kotak Multi Asset Allocation Fund hassle-free. You can do so by:
• Direct Investment: Invest directly with Kotak Mahindra Mutual Fund via their website or app.
•Through Distributors: You can also invest through financial advisors or brokers who can guide your investment decisions.
Before you begin, check if the investment goals and risk tolerance fit. First and foremost, always seek professional advice from a financial advisor to make sure this particular fund will fit into your overall investment strategy.
Conclusion
The Kotak Multi Asset Allocation Fund Regular Plan-Growth provides an attractive opportunity for diversification within a single portfolio with long-term capital appreciation as the goal. This fund is suitable for investors looking for both professional management and tax-friendly implications and is a good one for beginners as well as veterans.
As with any investment, it is always best to be investigated and based on any advice received from an advisor before you fashion your investment strategy according to personal needs. Happy investing!
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