AlphaGrep Launches Moderately Risked Liquid Omni Fund of Funds to Ensure Liquidity with Returns

AlphaGrep Launches Moderately Risked Liquid Omni Fund of Funds to Ensure Liquidity with Returns​

AlphaGrep Mutual Fund has launched the AlphaGrep Liquid Omni FOF, an open-ended Debt oriented Fund of Funds (FOF). The scheme is designed for investors seeking liquidity and reasonable returns while managing moderate risk. As a specialized FOF, it invests predominantly in units of various active and passive Liquid Schemes.

This new product aims to provide consistent access to high-quality liquid assets. While the focus remains on short-term funds, the structure allows limited exposure to debt instruments for portfolio diversification. The scheme has been assessed as having a Moderate risk profile by the AMC.

Investment Objective and Strategy of the FOF​

The primary objective of AlphaGrep Liquid Omni FOF is to generate income and maintain a high degree of liquidity. It achieves this through an active investment strategy that pools expertise across multiple underlying liquid funds. The fund manager actively monitors macroeconomic factors, interest rate movements, and market opportunities.

The investment approach involves constructing a diverse portfolio of liquid funds based on metrics such as performance consistency and risk-adjusted returns. This active allocation is balanced by ancillary investments in debt and money market instruments. These investments are limited to those with a residual maturity not exceeding 91 days.

Asset Allocation and Benchmark Alignment​

The core of the scheme’s asset allocation is placed into external liquid funds, which constitute between 95% and 100% of total assets. This structure ensures continuous alignment with market liquidity standards. A small proportion, ranging from 0% to 5%, can be allocated to debt and money market instruments like Treasury Bills and Certificates of Deposit (CDs).

The fund’s performance is meticulously measured against the Nifty Liquid Index A-I. This index acts as the key benchmark, reflecting the risk-return characteristics of the universe of short-term money market investments that the scheme targets.

Risk Management and Investment Restrictions​

As a debt-oriented FOF, the scheme faces several inherent risks characteristic of fixed income markets. These include Market Risk (related to changes in general interest rates) and Liquidity Risk (concerning the secondary marketability of specific money market securities). The AMC maintains strict investment restrictions to mitigate these challenges effectively.

The scheme mandates that its total exposure in any single sector does not exceed 20% of net assets. Similarly, exposure to a particular group is capped at 25% of the net assets. This adherence to regulatory limits helps maintain portfolio stability and compliance throughout the fund's operation.

Product Mechanics: Fees and Availability​

The AlphaGrep Liquid Omni FOF offers investors both Regular and Direct Plans. Importantly, the scheme includes a structured exit load designed to incentivize timely redemptions. The Exit Load starts at 0.0070% on Day 1 from the Date of Allotment and is gradually reduced for subsequent days.

The complexity of exiting the scheme is mitigated as the Exit Load becomes Nil from Day 7 onwards. There is no entry load charged, and the subscription process offers continuous liquidity throughout the business day on an ongoing basis. The fund ensures that redemption proceeds are dispatched within three working days of receiving a valid request.

Key Investment Details and Governance​

The scheme is managed by Mr. Ashish Jain, who holds qualifications including B.E Computers, MBA Finance, and CFA Level 2. He brings substantial experience across various financial institutions, spanning from life insurance to securities and infrastructure finance.

The fund structure allows investment in units of both active and passive liquid schemes, utilizing a combination of established domestic funds and liquid ETFs. The AMC has committed full transparency regarding the calculation and disclosure of the Net Asset Value (NAV). All necessary disclosures, including portfolio updates and risk-o-meter evaluations, are maintained on the AlphaGrep Mutual Fund website.