Union Mutual Fund launches open-ended dynamic asset allocation fund; offer to end Dec 15


Union Mutual Fund today launched an open-ended dynamic asset allocation fund, Union Prudence Fund.

The scheme will remain open for subscription until December 15.

The minimum application amount under the scheme is  Rs 5,000 and in multiples of one rupee thereafter.

Union Prudence Fund aims to capture growth opportunities through equities and provide stable income through debt.

It is an all season fund, ideal for investors looking for lower volatility as compared to a pure equity fund.

In terms of asset allocation, the scheme will allocate at least 65 percent of its assets in equity and equity related instruments, while the balance 35 percent will be deployed in debt and money market instruments.

The exposure to equity derivatives will be restricted to 45 percent. The gross equity exposure of the Scheme will be maintained between 65-100 percent, while the net equity exposure will be maintained between 30-100 percent.

The difference between these exposures will be carried out using derivatives. The derivatives may be used to hedge the gross exposure where the net exposure is required to be brought down.

The scheme will follow a multi parameter strategy to decide the allocation between equity and debt, and to reduce subjectivity.

Speaking about the launch, G Pradeepkumar, Chief Executive Officer (CEO), of Union AMC said, “Union Prudence Fund is ideal for investors who want to generate relatively steady returns in the form of growth or income over the medium to long term period.”

“The active asset allocation strategy that will be adopted by the scheme is expected to improve the chances of achieving this objective by lowering the volatility of returns.”