Taurus MIP Advantage Fund NFO: Review Analysis & Details

High on the heels of the recently launched Axis Triple Advantage Fund NFO: Review Analysis & Details, another mutual fund house has decided to come out with its NFO or New Fund Offer. The Taurus Mutual Fund House has launched its NFO or New Fund Offer called the Taurus MIP Advantage Fund NFO
In this article, we will analyse how good is this Taurus MIP Advantage Fund NFO, whether this Taurus MIP Advantage Fund offers anything new or unique for the investors and whether the investors should invest in Taurus MIP Advantage Fund .

Taurus MIP Advantage Fund NFO: Review Analysis & Details

Let's begin with some basic details about Taurus MIP Advantage Fund.

What are the NFO dates for Taurus MIP Advantage Fund ?
The NFO period for Taurus MIP Advantage Fund will open on 29th June and will close on 23rd July 2010.

What is so unique about this Taurus MIP Advantage Fund?
It seems that now the fund houses are trying to go hybrid i.e. they are coming up and offering new products which are a mix of various asset categories rather than a particular sector or even asset focussed fund. This Taurus MIP Advantage Fund is an example of the same where investors can get benefit of diversification in three different asset types - Equity, Debt and Gold.
So when you have such a huge diversified base of investments by the fund managers, what becomes important to note is where your money is going and in what proportion. As per the NFO details available, the invested money will be invested into the following in the mentioned proportion:

- Shares/Equity and related instruments - 0-25%
- Debt Instruments (Fixed Income Securities) - 65-95%
- Gold ETF's or Gold Exchange Traded Funds - 5-25%

Now that gives a clear indication that the focus of this fund will primarily be on the debt side. The rest of the money will be played on in the equity and gold etf side, which will offer a good mix. However, the timing of switching money from one investment class to the other will determine the returns and that is where the mutual fund managers skills come into picture. By investing money in this fund, you are giving that responsibility to fund managers and their skills.
So overall, this Taurus MIP Advantage Fund seems to be offering a good mix of 3 variety of products. The proportion of allocation also seems to be good enough. However, I think the proportion of allocation might change at the sole discretion of the mutual fund managers.

During NFO, the units of this Fund will cost Rs 10 per unit.
Ideally speaking, this fund should be looked upon by the investors who want a mix of equity, debt and gold in their investment portfolio, but want to keep the headache off by doing it themselves and are ready to trust a fund manager to do that. This Taurus MIP Advantage Fund will be good option for such investors. However, one thing to note is that just because there is a lot of diversification, it does not mean that food returns are guaranteed.
As stated in one of our earlier articles, the risk part still remains irrespective of diversification. What if you invest 10,000 in this fund. The fund managers buy equity worth 3500, debt worth 3500 and gold worth 3000. After 5 years, the returns from equity are down by 30%, returns from debt is up by 10%, and returns from gold are up by 15%. Equity portion will then stand at 2500, Debt at 3850 and Gold at 3450. So your net value will be 9,800 - i.e. less than your invested 10K.
Now the above is only an example to illustrate that just by investing in a diversified fund does not guarantee returns. Also, the more different instruments one invests in, the more brokerage charges and commission is to be paid. That adds to the cost and reduces the profit and returns. Investors should keep these things in mind while making investments in any funds or any financial products.

Are there any alternatives to Taurus MIP Advantage Fund?
Yes, a similar fund is launched by Axis Mutual Fund House - Axis Triple Advantage Fund NFO: Review Analysis & Details
Another option to consider is buying these different financial assets on your own. But then you will have to take the buy sell decisions and timing them will be your responsibility.
Mr. Rahul Pal and Mr. Sadanand Shetty will be the fund managers for debt and Equity+gold respectively.

The Taurus MIP Advantage Fund will be benchmarked to a composite 75% CRISIL MIP Blended Fund Index and Composite Bond Fund Index and 25% Price of Gold

Minimum Investment:
Purchases : Rs. 5000/- and in multiple of Re. 1 thereafter.
SIP or Systematic Investment Plan is available? - No Info

No Tax Benefit is available in the Taurus MIP Advantage Fund

Investment Options for Taurus MIP Advantage Fund :
- Growth
- Dividend (Payout and Reinvestment)

The entry load for Taurus MIP Advantage Fund is as follows:
Entry Load for Taurus MIP Advantage Fund :
Zero Entry Load

Exit Load for Taurus MIP Advantage Fund:
1% if the amount sought to be redeemed or switched out is invested up to 1 year from date of allocation.

Final Thoughts about the Taurus MIP Advantage Fund?
This fund can be a good investment for investors willing to bet on the skills of the Taurus Fund Managers and who believe that diversification can offer good returns as well as risk control.