Chennai, April 2018: IIFL Asset Management Ltd (IIFL AMC) announced today the launch of IIFL Capital Enhancer Fund – Series 1 (An Annual Interval Scheme investing in Equity and Equity Related Securities) (‘the scheme’), a scheme that aims to provide the benefits of equity upside with a hedge against the market downside. The scheme is structured as an Annual Interval Scheme, with an objective to achieve long term capital appreciation by investing in equity and equity related securities, with strategy of hedging the portfolio with Nifty 50 Put Option and other Equity derivatives.
The asset allocation scenario in India suggests that investors prefer fixed income over equity. This arises from the perception that fixed income provides regular and stable returns as well as security of capital, whereas equity infuses a sense of risk. However,investors discount the fact that though equities seem volatile in the short term, they create wealth in the long term.
Mr. Amit Shah, CEO, IIFL Asset ManagementBusiness said: “IIFL Asset Management understands investors’ sentiment towards equity risks and intends to address their concerns by offering them improved prospects. The IIFL Capital Enhancer Fund- Series 1 is tailored with an objective to limit the downside by investing in a ‘put option’ thus providing the investor a hedge against a market correction. Our Studies have shown that 95% of portfolio returns in long term are derived from appropriate asset allocation and only 5% derived from product selection. IIFL Capital Enhancer Fund – Series 1 aims to offer comfort to long term investors to focus on appropriate asset allocation rather than being worried about short term volatility.”
The schemewillinvest predominantly in large cap portfolio and hedge the portfolio with the Nifty 50 Put Option. This allows investors to invest in a theme that aims to ‘minimise the risk and maximise the upside.’ The scheme aims to generate alpha by limiting the downside with a potential to an uncapped upside. The Annual Interval feature allows investors an option to subscribe or exit during the specified transaction period every year.