The capital market regulator laid down specific terms and conditions for launching New Fund Offers (NFOs), while it even nudged fund houses to merge similar schemes. Following this, mutual fund houses in India performed a massive exercise of re-categorising and repositioning their scheme offerings. These actions had a common objective to achieve – to do away with scheme duplication which can help investors in scheme selection. But as they say, old habits die hard. Mutual fund houses have launched NFOs again. And many of them are launching the closed-ended ones, since the latest SEBI rules are not applicable to them. Are these fund houses not concerned about the consequences of scheme duplication? And launching NFOs particularly when valuations appear stretched exposes investors to very-high risk.
NFOs of various hues adorn the October 2018 NFONEST.
Axis Growth Opportunities Fund
Opens: October 1, 2018
Closes: October 15, 2018
Axis Mutual Fund will launch Axis Growth Opportunities Fund, an open-ended equity scheme that will invest in domestic equities as well as foreign securities. The scheme will invest 30 to 35% of its assets in domestic large caps and up to 35% in foreign securities, which would be predominantly large caps, making a total of 35 to 65%. The company can also deploy up to 35-40% in midcap stocks. The overseas allocation will be made by directly investing in foreign securities advised by Schroder Investment Management. Overseas investment philosophy is aligned with domestic Axis philosophy of bottom-up investing in high-quality stocks with high growth prospects. The target of the high-quality portfolio construct is to generate sustainable long-term performance while keeping risk contained. The fund uses S&P BSE 200 Total Return Index as the base index. Jinesh Gopani and Hitesh Das are the fund managers for the firm.
Invesco India Small Cap Fund
Opens: October 10, 2018
Closes: October 24, 2018
Invesco Mutual Fund has launched a new fund named as Invesco India Small Cap Fund, an open ended equity scheme predominantly investing in small cap stocks. The investment objective of the scheme is to generate capital appreciation by investing predominantly in stocks of Smallcap companies. The scheme will invest 65-100% assets in equity and equity related instruments of small cap companies with high risk profile and invest up to 35% of assets in equity and equity related instruments of companies other than smallcap companies with high risk profile and up to 35% assets in debt and money market securities with low to medium risk profile. The scheme’s performance will be benchmarked against S&P BSE 250 Smallcap Index. The fund managers of the scheme are Taher Badshah and Neelesh Dhamnaskar.
Sundaram Long Term Tax Advantage Fund – Series VI
Opens: September 25, 2018
Closes: December 24, 2018
Sundaram Mutual Fund has launched a new fund named as Sundaram Long Term Tax Advantage Fund – Series VI, a closed-end equity linked saving scheme with a statutory lock in of 3 years and tax benefit. The tenure of the scheme is 10 years from the date of allotment of units. The investment objective of the scheme is to generate capital appreciation over a period of ten years by investing predominantly in equity and equity-related instruments of companies along with income tax benefit. The scheme will invest 80%-100% in equity and equity related securities with high risk profile and invest up to 20% of assets in fixed income and money market securities with low to medium risk profile. The scheme’s performance will be benchmarked against S&P BSE 500 Index. The fund managers of the scheme are S Krishnakumar and Dwijendra Srivastava.
ABSL Bal Bhavishya Yojna, Essel Focused Equity Fund, UTI S&P BSE Sensex Next 50 Exchange Traded Fund, ICICI Prudential Retirement Fund, Invesco India Equity Savings Fund, Indiabulls Nifty 50 Exchange Traded Fund, Aditya Birla Sunlife Overnight Fund and Reliance Capital Protection Oriented Fund I are expected to be launched in the coming months.