NFOs open for subscription during the Current Week (2-Aug-2023)

For the week commencing on 01st August 2023, there are a total of 7 new fund offerings (NFOs) available for investors. These funds range from a wide spectrum of active equity, passive equity, and closed ended funds. Here is a quick look at the 7 funds available for subscription this week.

1. Bajaj Finserv Flexi Cap Fund

This fund comes from the house of Bajaj Finserv, which has been one of the recent entrants in the mutual funds arena. The Bajaj Finserv Flexi Cap Fund is an actively managed fund across large cap, mid-cap, and small cap equities. The objective of the fund is to generate long term capital appreciation by investing predominantly in equity and equity related instruments across market capitalisation. Being a flexi-cap fund, the fund manager has a much greater discretion on how much to allocate to large caps, mid-caps, and small cap stocks; unlike a traditional multi-cap fund. However, there is no assurance that the investment objective of the Scheme will be achieved and it remains a high risk fund.

The new fund offering (NFO) opened for subscription on 24th July 2023 and closes for subscription on 07th August 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 1% (100 basis points) if the fund is redeemed or switched out within 6 months of the allotment of the fund. The exit load would be exempt up to 10% of the investment and only beyond that the exit load will be levied. For any holding beyond 6 months, no exit load will be levied. Flexi Cap funds have been preferred by investors as they combine the stability of large caps with the promise of mid-caps and the alpha generation abilities of small caps. The minimum subscription amount in the NFO will be ₹500 per application and in multiples thereof. In terms of performance benchmarking, the fund would be benchmarked with the S&P 500 BSE TRI index.

2. HDFC Charity Fund for Cancer Cure (FMP)

This fund comes from the third largest fund house in India, HDFC Asset Management Company Ltd. It will be a closed ended scheme and being a fixed maturity plan (FMP), it will have a tenure of 1,196 days. Being a closed ended debt fund with predominant debt exposure, the fund would largely invest in the debt markets and hence would be taxed at the peak rate in the case of any capital gains earned. Being an FMP and predominantly in debt, the tenure of the underlying bonds is approximately known, which makes it a fund with moderate risk. Being a closed ended fund, it would be listed on the stock exchanges.

The NFO opened on 28th July 2023 and closes for subscription on 08th August 2023. There is no entry load involved here and being a closed ended fund, there is also no exit load levied on the fund. While such funds are generally considered safe and low on risk, a lot will depend on the quality of the bond held and the interest rate risk if any. The NFO entails a minimum investment of ₹50,000 per application.

3. HDFC Transportation and Logistics Fund

This is another fund from the HDFC AMC, and this is a thematic fund with focus on the transport and logistics sector, where there is supposed to be huge potential in India in the next few years. The investment objective of the scheme is to provide long-term capital appreciation by investing predominantly in equity and equity related securities under Transportation and Logistics theme There is no assurance that the investment objective of the Scheme will be realized. The fund does not guarantee returns but being a high risk sectoral / thematic fund, there would be a high level of concentration risk in the fund. The automobiles and auto ancillary sector are likely to predominate within the fund portfolio.

The new fund offering (NFO) opened for subscription on 28th July 2023 and closes for subscription on 11th August 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. There is no entry load but an exit load of 1% will be levied if redeemed before 1 year. The minimum investment is ₹100 and the performance of the fund will be benchmarked to the Nifty Transportation and Logistics Index.

4. Kotak Nifty Financial Services (Ex-Bank) Index Fund

This fund comes from the house of Kotak Mahindra AMC, which is among the top 5 AMCs in India in terms of total AUM. This NFO is an open ended fund benchmarked to the index. The objective of the fund is to replicate the composition of the Nifty Financial Services Ex-Bank Index and generate returns commensurate with the performance of the Nifty Financial Services Ex-Bank Index, subject to tracking errors. However, the scheme does not assure or guarantee any returns, but would try to track the specific index as closely as possible. Being a passive play, the costs would be much lower.

The new fund offering (NFO) had opened for subscription on 24th July 2023 and closes for subscription on 07th August 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 being an index fund, there is no exit load either. The core intent of the fund is to just mirror the particular index and not to earn alpha for investors by taking stock-specific risk. The minimum subscription amount in the NFO will be ₹5,000 per application and in multiples thereof.

5. Mirae Asset Multi Cap Fund

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 multi-cap fund, combining large caps, mid-caps, and small caps with minimum allocation of at least 25% to each of these categories. The investment objective of the fund is to provide long-term capital appreciation from a portfolio investing predominantly in Indian equity and equity related securities of large cap, mid cap, and small cap companies. However, there is no assurance that the investment objective of the Scheme will be realized.

The new fund offering (NFO) opened for subscription on 28th July 2023 and closes for subscription on 11th August 2023. That would be the earliest closing date and it could be extended if the situation so demands. The minimum subscription amount in the NFO will be ₹5,000 per application and in multiples thereof in the NFO. The Nifty will be benchmarked to the Nifty 500 Multicap 50:25:25 TRI index.

6. Quant Manufacturing 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 long term capital appreciation by investing in equity and equity related instruments of companies that follow the manufacturing theme. These are the direct and indirect plays on manufacturing in India. However, the Scheme does not assure or guarantee any returns. It is an open ended thematic equity fund so there is the equity risk as also the sectoral concentration risk in the Quant Manufacturing Fund NFO.

The new fund offering (NFO) opened for subscription on 26th July 2023 and closes for subscription on 08th August 2023. The fund will not have any entry load or exit load applicable. The fund uses proprietary models to identify and time the best manufacturing themes at this juncture from a long term perspective. The minimum subscription amount in the NFO will be ₹5,000 per application. It offers the regular plan and the direct plan and also offers the growth option and the IDCW option for investors. In terms of benchmarking the performance, it would be done against the Nifty India Manufacturing TRI Index.

7. UTI Balanced Advantage Fund (BAF)

UTI Balanced Advantage Fund comes from the oldest AMC in India, which has been around since 1963. The investment objective of the scheme is to provide long-term capital appreciation and income by investing in a dynamically managed portfolio of equity and debt instruments. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved. The fund will have a debt portion, an arbitrage (cash futures) portion and a pure equity unhedged portion. This reduces the overall risk of the fund.

The new fund offering (NFO) opened for subscription on 21st July 2023 and closes for subscription on 04th August 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 actually hybrid fund with the fund manager using tested models on the allocation. It is also called dynamic allocation fund or balanced advantage fund (BAF). The minimum subscription amount in the NFO will be ₹5,000 per application and in multiples of ₹1 thereof. There will be no entry load. However, exit load of 1% will be levied for redemptions within 1 year. This will not apply for up to 10% of the corpus held by the customer and will apply only beyond that amount.