What is the maximum allocation for fixed income assets in an Equity Fund within a UITF?

The maximum allocation for fixed income assets in an Equity Fund within a Unit Investment Trust Fund (UITF) is typically set at 50%. This allocation rule is in place to ensure that the fund primarily invests in equities, aligning with the fund's classification as an Equity Fund.

Equity Funds are chiefly designed to achieve capital appreciation by investing predominantly in stocks, and the limit on fixed income assets helps to maintain this investment objective. By capping the allocation to fixed income at 50%, the fund managers can still provide some level of stability and income through bonds or other fixed income securities, which can help mitigate risk during volatile market conditions. However, keeping this allocation below the 50% threshold ensures that the fund fundamentally retains its focus on equity investments, thereby aligning with investor expectations for higher growth potential.

Thus, the specified limit of 50% is crucial for maintaining the integrity and purpose of an Equity Fund within the UITF framework.