NEW DELHI: Morningstar Investment Adviser India has launched Morningstar Managed Portfolios, which will allow investors to have an exposure of the international stock markets, depending on their appetite.
Investors will have four funds to choose from: Morningstar Active Balanced Portfolio, Morningstar Active Growth Portfolio, Morningstar Active Aggressive Portfolio and Morningstar Active Aggressive Plus Portfolio.
“The first three will have exposure to international markets; the fourth (Morningstar Active Aggressive Plus Portfolio) will be focused on domestic equity,” said Dhaval Kapadia, director, Morningstar Investment Adviser.
A subsidiary of Nasdaq-listed Morningstar Inc, it has $41.7 billion in assets under management (AUM), 10 million of individual investors and 5,100 institutional investors. “Investors largely have an appetite for international markets, but they do not understand the dynamics. These funds will provide domestic investors an opportunity to join the global growth story and also balance their portfolio,” Kapadia said.
The company has recently received approval from the Securities and Exchange Board of India to start portfolio management services. The minimum investment size for its services is Rs 25 lakh.
“The global markets don’t necessarily move in the same direction as the domestic markets. So, from an investment point of view, spreading money across geographies can reduce the overall investment risk from the volatility of domestic markets,” Kaustubh Belapurkar, director (fund research), said.
The firm charges 1 per cent fund management fee, which will cover the financial adviser’s commission as well. It will also levy an exit load of 1 per cent if an investor withdraws investment within one year.
Kapadia said the service would typically ask for an investment horizon of over five years, and the exit load of 1 per cent per year is to avoid abrupt churns.
The PMS services will be sold only through financial advisers. Over the next 3-4 years, Morningstar aims to grow the size of its PMS AUM to Rs 1,000 crore.