Quantum Mutual Fund Have applied for an overseas feeder fund – Quantum Global Fund of Funds (FOF), an open-ended scheme that will primarily invest in shares or units Vanguard Fund, Quantum Global FOF is a multi-asset fund with exposure to equity, debt and gold. Equity allocation will be further diversified across different geographies. The list of funds to invest in this scheme includes Vanguard S&P 500 ETF, Vanguard FTSE Emerging Markets ETF, Vanguard FTSE Developed Markets ETF, Vanguard Growth ETF, Vanguard Long/Extended Term Treasury ETF. Vanguard Intermediate Term Treasury ETF and SPDR Gold Shares/iShares Gold Trust/Other Overseas Gold ETFs. The fund will invest at least 10% of the portfolio in S&P 500, emerging markets and developed markets ETFs. It also plans to invest a minimum of 5% in gold-based funds. There is no minimum asset allocation prescribed for the loan.
Talking about investing in the overseas debt market, Chirag Mehta, Senior Fund Manager, Quantum Asset Management, said, “During any crisis like the 2008 global financial crisis and the COVID-19 crisis, there has been a gap between global equities and Indian equities. The relationship grows. Also, while investing internationally, one needs stability in the portfolio that can be provided by debt and gold.” Comparing fixed income investments in India versus abroad, Mehta said, “The current In the U.S., the yield gap for debt investments between India and the US is 4.5-5%. In the long run, the rupee has depreciated by 2.5-3.5%, if you take this into account, the yield gap is very less from the investors point of view.” The returns from the scheme depend on the right mix of fund allocations The scheme will plan its allocation strategy on the basis of relative performance of each asset class/market, relative valuations and macro-economic factors as mentioned in the SID. Thus, the fund manager’s call comes into picture here. That the underlying ETF and/or Index Fund are not actively managed but passively managed.The fund will be managed by Chirag Mehta, who currently holds Quantum Gold Fund, Quantum Gold Savings Fund, Quantum Equity Fund of Funds, Quantum Multi Asset Fund and Quantum India are also managing ESG Equity Fund. The scheme will be benchmarked to S&P BSE Sensex Index 60% + CRISIL Composite Bond Fund Index 30% + Gold Price at 10%. The SID indicates that the benchmark will be , which includes Indian indices, the fund’s desired value The long-term average is representative of the asset allocation strategy. We need to wait and see if the regulator SEBI allows foreign funds to benchmark with Indian indices.
foreign investment limit
This FoF is expected to invest a maximum of $60 million in foreign securities and $200 million in foreign ETFs within a period of six months from the close of the new fund offer. Currently, there is a ban on investments in mutual funds investing in foreign securities as the MF industry is close to crossing the $7 billion limit of SEBI. Keeping this in mind, the fund can be launched after SEBI raises the investment limit in foreign securities, provided the scheme has all regulatory approvals.
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