NFOs open for subscription during the current week

For the week commencing on 05th June 2023, there are 8 NFO or new fund offerings of mutual funds available for investors. These funds range from a wide spectrum of active equity, passive equity, commodity, and multi-asset funds. Here is a quick look at the eight funds available for subscription this week.

1. Edelweiss Multi-Asset Allocation Fund

This fund comes from the house of Edelweiss MF, which has been among the fastest growing funds in terms of non-equity AUM. This Edelweiss Multi-Asset Allocation Fund is an actively managed fund across multiple asset classes like equity, debt, commodities, and derivatives. The objective of the fund is to generate long-term capital appreciation with a smart and diversified approach to managing risk. It will be classified as a hybrid scheme under the AMFI definition. Investors get a single point access to multiple asset classes and an auto diversification edge through this multi-allocation fund.

The new fund offering (NFO) opens for subscription on 05th June 2023 and closes for subscription on 19th June 2023. That would be the earliest closing date and it could be extended if the situation so demands. The fund will not have any entry load. However, there will be an exit load of 0.10% (10 basis points) if the fund is redeemed or switched out within 30 days. There would be no exit load if the funds are held beyond 30 days. Multi asset allocation funds have been the range in recent times as they bring in the benefits of active and passive investing in a single platter. The minimum subscription amount in the NFO will be ₹5,000 per application and it can be done in multiples of ₹1 thereafter.

2. ITI Focused Equity Fund

This fund comes from the house ITI Financial Services and Fortune Financial. This NFO is a pure equity open ended fund with the objective of generating long-term capital appreciation from a very concentrated portfolio of equity and equity related instruments. It will limit its universe to upto 30 companies across market capitalization. The core intent of the fund is to beat the market and earn above market returns so as to generate alpha for the investors in the fund through its very granular sectoral approach. The focus will be on a handful of sectors and stocks only and the fund managers will look at value and also timing of cycles to optimize their entry advantages.

The NFO opened on 29th May 2023 and closes for subscription on 12th June 2023. There is no entry load in the fund but exit load will be levied at 1% if held for less than a period of one year. The NFO entails a minimum investment of ₹5,000 per application.

3. Kotak Nifty 200 Momentum 30 Index Fund

This fund comes from the house of Kotak Mahindra Asset Management Company (Kotak AMC) and is among the top 5 AMCs in India in terms of assets under management (AUM). The investment objective of the scheme is to provide returns that, before expenses, corresponding to the total returns of the securities as represented by the underlying index, subject to tracking error. Being an index fund, the focus is to match the index returns and not to beat the index. The fund does not guarantee returns but would endeavour to keep the tracking error of the fund as low as possible to ensure legitimate tracking of the index.

The new fund offering (NFO) opened for subscription on 25th May 2023 and closes for subscription on 08th June 2023. That would be the earliest closing date and it could be extended if the situation so demands. Being an open ended fund, it will provide continuous sale and redemption at NAV linked prices post the closure of the NFO and the completion of allocation of units. The minimum subscription amount in the NFO will be ₹5,000 per application. The investment approach is passive, which is tune with the rising demand for passive fund investing in India.

4. NJ ELSS Tax Saver Scheme

This fund comes from the house of NJ Asset Management Company which is a recent entrant in the AMC business. However, the Surat based group has been one of the biggest mutual fund distributors for a long time, outside the bancassurance space. This NFO is a pure equity open ended fund with the objective of generating long-term capital appreciation from a diversified portfolio of predominantly equity investments. In India, tax saving funds have to necessarily be equity funds. Being a tax saving fund, there will be the benefit of Section 80C available to investors within the limit of ₹1.50 lakhs per year. However, the ELSS fund will entail a minimum lock-in period of 3 years from the date of investment. The lock-in is mandatory for any investors, irrespective of the tax benefit being available to them or not. The tax benefit substantially enhances effective yield on the fund.

The new fund offering (NFO) had opened for subscription on 13th March 2023 and closes for subscription on 09th June 2023. That would be the earliest closing date and it could be extended if the situation so demands. The fund will not have any entry load and exit load will not be applicable due to the mandatory 3-year lock in requirement in ELSS Funds. The core intent of the fund is to beat the market and earn alpha for investors by taking a longer term view, which is facilitated by the lock-in stipulation. The minimum subscription amount in the NFO will be ₹500 per application and in multiples of ₹500 thereof.

5. Mirae Asset Silver ETF

Mirae has been one of the few AMCs to grow its assets under management beyond the ₹1 trillion market purely on the strength of an equity franchise. Its latest offering is a commodity fund, coming in the form a silver ETF (exchange traded fund). The intent of the fund is to generate returns that are in line with the performance of physical silver in domestic prices, subject to tracking error. The Scheme does not guarantee or assure any returns. Also, the performance of the silver ETF will be in sync with the Rupee silver prices; so there will be a commodity angle and a currency angle to it.

The new fund offering (NFO) opened for subscription on 29th May 2023 and closes for subscription on 06th June 2023. That would be the earliest closing date and it could be extended if the situation so demands. The fund will not have any entry load and not exit load will be charged for redeeming the funds. The minimum subscription amount in the NFO will be ₹5,000 per application and in multiples of ₹1 thereof in the NFO. Being an ETF, the fund will not offer sale and repurchase, but the ETF would be listed on the stock exchanges and traded real time at NAV linked prices.

6. Quant BFSI Fund

This comes from one of the fastest growing AMCs and a leader in performance in most categories. The primary investment objective of the scheme is to generate consistent returns by investing in equity and equity related instruments of banking and financial services. The focus will be on specific banking themes like financial inclusion, technological innovation, and digitization. The fund will invest in banks, NBFCs, insurers, fintech players, AMCs, exchanges, credit rating agencies etc. However, there is no assurance that the investment objective of the Scheme will be achieved. Being a sectoral / thematic fund, the risk of concentration and cyclical downsides can be quite high.

The new fund offering (NFO) opened for subscription on 01st June 2023 and closes for subscription on 14th June 2023. The fund will not have any entry load or exit load applicable. The fund uses proprietary models to identify and time the best BFSI themes at this juncture from a long term perspective. The minimum subscription amount in the NFO will be ₹5,000 per application.

7. UTI Nifty 50 Equal Weight Index Fund

This comes from the oldest AMC in India, which has been around since 1963. The investment objective of the scheme is to provide returns that, before expenses, corresponds to the total return of the securities as represented by the underlying index, subject to tracking error. However, there is no guarantee or assurance that the investment objective of the scheme will be achieved. The fund, being an index fund, will continuously try and minimize tracking errors such that the fund performance reflects the index credibly.

The new fund offering (NFO) opened for subscription on 22nd May 2023 and closes for subscription on 05th June 2023. That would be the earliest closing date and it could be extended. The fund will not have any entry load or exit load. It is more of a passive index fund with an allocation bias and discretion. The minimum subscription amount in the NFO will be ₹5,000 per application and in multiples of ₹1 thereof.

8. UTI S&P BSE Housing Index Fund

This is the second fund coming from the oldest AMC in India. The investment objective of the scheme is to provide returns that, before expenses, corresponds to the total return of the securities as represented by the underlying index, subject to tracking error. However, there can be no guarantee or assurance that the investment objective of the scheme will be achieved. The fund will try and minimize tracking errors.

The new fund offering (NFO) opened for subscription on 22nd May 2023 and closes for subscription on 05th June 2023. That would be the earliest closing date. The fund will not have any entry load or exit load. It is more of a passive index fund. The minimum subscription amount in the NFO will be ₹5,000 per application and in multiples of ₹1 thereof. Both the UTI funds close for subscription today.