Bank of India Business Cycle Fund - NFO Details

The Bank of India Business Cycle Fund is your gateway to seizing growth opportunities by strategically riding the waves of the business cycle. With a sharp focus on identifying powerful growth themes, this fund dynamically shifts investments across sectors and stocks, adapting to the ever-changing market landscape. Whether driven by long-term trends or macroeconomic shifts, it’s designed to capitalize on every stage of the business cycle, positioning you for success.

Bank of India Business Cycle Fund NFO Details:

Bank of India Business Cycle Fund is an open-ended equity scheme in the Sectoral/Thematic category. It opens on August 9, 2024, and closes on August 23, 2024. The minimum investment amount is ₹5,000, with subsequent investments in multiples of ₹1.

Investment Objective and Strategy of Bank of India Business Cycle Fund

Objective:

The Scheme aims to achieve long-term capital growth by primarily investing in equity and equity-related securities, utilizing a dynamic allocation strategy across different sectors, industries, and stocks throughout various stages of the economic business cycle. However, it is important to note that there is no guarantee that the Scheme's investment objective will be met. 

Investment Strategy:

The Scheme seeks to achieve capital appreciation by primarily investing in equity and equity-related securities, with an emphasis on navigating business cycles through a dynamic allocation strategy across various sectors and stocks at different stages of the economic cycle. Fund management will actively adjust allocations among sectors, stocks, and investment styles based on the current phase of the business cycle. The fund manager will take into account both macroeconomic and microeconomic factors, supplemented by an internal, proprietary model that integrates fundamental and technical stock analysis to create a portfolio aligned with the Scheme's investment objective. The stock selection process will focus on identifying companies with strong corporate management and promising growth potential. The fund managers will prioritize companies that offer the best value relative to their long-term growth prospects, returns on capital, and management quality. 

Why Invest in Bank of India Business Cycle Fund?

This investment strategy aims for long-term capital appreciation by focusing on equity and equity-related instruments, with an emphasis on navigating business cycles through dynamic allocation across various sectors and stocks at different stages of the economic cycle. It is suitable for investors with a high risk appetite who are seeking an equity-oriented portfolio designed to dynamically invest in businesses and sectors expected to benefit from medium to long-term growth themes. This approach is best suited for those with an investment horizon of 5 years or more.

Strength and Risks Bank of India Business Cycle Fund

Strengths:

•    Aligns with macro factors/mega trends
•    Mitigates cyclical risks
•    Capitalizes on economic/demographic shifts
•    Endeavors to invest in businesses in/at the cusp of expansionary phase of business cycle
•    Dynamic investment strategy to identify focused themes 

Risks:

The Scheme will allocate at least 80% of its net assets to equity and equity-related securities, with a particular focus on stocks that align with the business cycle theme. As a thematic scheme, it is inherently subject to the risks associated with this specific theme. Investing in thematic schemes involves targeting companies that adhere to a particular theme, which in turn restricts the Scheme's ability to invest in other companies or themes, leading to a higher concentration risk. The Scheme will primarily invest in equity and equity-related securities of companies engaged in the selected theme, which increases the concentration risk. Additionally, as with any equity investment, there is a risk that companies within the theme may not meet expected earnings projections, or that unexpected changes in the market or within the company could negatively impact investment outcomes. Due to the higher concentration risk inherent in thematic schemes, the potential for capital loss is significant. Furthermore, unpredictable market cycles that may extend over prolonged periods, along with risks such as value loss due to obsolescence, regulatory changes, or the theme not unfolding as anticipated, can lead to permanent capital loss. Therefore, investing in a thematic fund could involve greater volatility and risk.