Edelweiss Multi Cap Fund, three other NFOs open for subscription this week; should you invest?
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Synopsis
The new fund offers of an index fund, a multi cap fund, a balanced hybrid fund, and small cap fund are slated to open this week. The NFO of the index scheme is open and the multi cap, balanced hybrid, and small cap fund will open for subscription later this week.
By Surbhi Khanna, ET Online
Last Updated:
Four new fund offerings or NFO are slated to hit the market this week. Groww Nifty Total Market Index Fund is open for subscription and Edelweiss Multi Cap Fund, WhiteOak Capital Balanced Hybrid Fund, and Baroda BNP Paribas Small Cap Fund will open for subscription later this week.
Edelweiss Multi Cap Fund is an open-ended equity scheme that will invest across large cap, mid cap, small cap stocks. The new fund offer or NFO of the scheme will open for subscription on October 4 and it will close on October 18.
The investment objective of the scheme is to generate long-term capital appreciation by investing in a diversified portfolio of equity & equity-related instruments across large cap, mid cap and small cap stocks.
The minimum application amount for lumpsum investment is Rs 5,000 and multiples of Re 1 thereafter. For SIP the minimum application amount is Rs 100 and in multiples of Re 1 thereafter.
BNP Paribas Small Cap Fund
BNP Paribas Small Cap Fund is an open-ended equity scheme predominantly investing in small cap stocks. The new fund offer or NFO of the scheme will open for subscription on October 6 and it will close on October 20.
The performance of the scheme will be benchmarked against Nifty Small Cap 250 TRI Index. The scheme will be managed by Shiv Chanani and Miten Vora.
The scheme will invest 65-100% in equity and equity related instruments of small cap companies. 0-35% in equity and equity related instruments of other than small cap companies, 0-35% in debt and money market instruments, 0-10% in units issued by REITs & INvITs, and 0-10% in units of mutual fund scheme.
The scheme will follow a bottom-up approach to pick stocks across the sectors based on the quality of the business model and quality of management. The fund manager will look at both value and growth stocks in picking out individual companies.
Groww Nifty Total Market Index Fund
The performance of Groww Nifty Total Market Index Fund is benchmarked against the Nifty Total Market Index (Total Return Index). The scheme will be managed by Anupam Tiwari.
The investment objective of the scheme is to achieve a return equivalent to the Nifty Total Market Index-TRI subject to tracking error. This index is diversified throughout the Indian market across sectors and market caps and aims to benefit from India’s economic growth.
The minimum application amount is Rs 1000 and in multiples of Re1 for purchases and of Re 0.01 for switches.
The scheme will invest 95-100% in equities and equity related securities covered by Nifty Total Market Index, and 0-5% in debt, and money market instruments.
WOC Balanced Hybrid Fund
WhiteOak Capital Balanced Hybrid Fund is an open-ended balanced scheme investing in equity and debt instruments.
The new fund offer or the NFO of the scheme will open for subscription on October 5 and it will close on October 19. The scheme will re-open for continuous sale and repurchase within five business days from the date of allotment.
The performance of the scheme will be benchmarked against CRISIL Hybrid 50+50 Moderate Index. The scheme will be managed by Ramesh Mantri (equity investments), Trupti Agrawal, Piyush Baranwal (debt investments), and Shariq Merchant (overseas investments).
The investment objective of the scheme is to provide long term capital appreciation and generate income by investing in a balanced portfolio of equity and equity related instruments and debt and money market securities.
The minimum application amount is Rs 500 and in multiples of Re 1 thereafter. The minimum investment amount for weekly, fortnightly, and monthly SIP is Rs 100 (plus in multiple of Re 1) with minimum six instalments. The minimum application amount for quarterly SIP is Rs 500 (plus in multiple of Re 1) with minimum four instalments.
The scheme will invest 40-60% in equity and equity related instruments (including foreign securities), and 40-60% in debt securities (including securitized debt) and money market instruments, cash, and cash equivalents and / or units of domestic liquid mutual fund schemes.
Should you invest?
Should you invest in these NFOs? We typically ask investors to avoid investing in NFOs unless they offer something unique. The uniqueness could be that the scheme is offering an investment option that is not available in the market or offering something extra to an existing option. Otherwise, we believe investors are better off with an existing scheme with a long performance record. This is because you have some historical data to base your investment decision. You don’t have any data when it comes to new offerings.
Groww Nifty Total Market Index Fund is the first total market index fund in the market. Clearly, you have to rely on the performance record of the index. If you believe the index has the potential to offer superior returns, you may invest in the scheme. Nifty Total Market - TRI has a record of one year. It offered 18.51% in the last one year.
Edelweiss Multi Cap Fund and Baroda BNP Paribas Small Cap Fund, as you might have already guessed, are a new multi cap and small cap fund launched by the respective fund houses. There are schemes with performance record in both the categories.
There are around eight schemes in the multi cap category. The multi cap category with new investment mandate of 25% investments in three major market capitalisations was introduced in September 2020. That means, these schemes have a performance record of a little over three years. Nippon India Multi Cap Fund, the topper in the category, offered 38.95%. Quant Active Fund offered 32.46%. Mahindra Manulife Multi Cap Fund offered 31.35%. Four schemes offered more than 25% in a three year horizon and ITI Multi Cap Fund offered the lowest return of around 22%.
In the small cap category, there are around 10 schemes that have a performance record of around 10 years. Nippon India Small Cap Fund gave the highest return of around 29.73%. SBI Small Cap Fund gave 27.10%. DSP Small Cap Fund gave 25.81%. Four schemes gave around 20%. Aditya Birla Sun Life Small Cap Fund and ICICI Prudential Smallcap Fund gave 19.13% and 18.59% respectively. Quant Small Cap Fund gave the lowest return of around 17.74%.
WhiteOak Capital Balanced Hybrid Fund is a balanced hybrid fund. There is only one scheme - 360 ONE Balanced Hybrid Fund - in the category which is relatively new in the market. The scheme was launched in September. Mutual funds can launch either balanced schemes or aggressive hybrid schemes. Since many fund houses already had aggressive hybrid schemes, many couldn’t launch balanced schemes. If the asset allocation appeals to you, you can consider investing in these schemes once they build a performance record.
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Edelweiss Multi Cap FundEdelweiss Multi Cap Fund is an open-ended equity scheme that will invest across large cap, mid cap, small cap stocks. The new fund offer or NFO of the scheme will open for subscription on October 4 and it will close on October 18.
FEATURED FUNDS
The investment objective of the scheme is to generate long-term capital appreciation by investing in a diversified portfolio of equity & equity-related instruments across large cap, mid cap and small cap stocks.
The minimum application amount for lumpsum investment is Rs 5,000 and multiples of Re 1 thereafter. For SIP the minimum application amount is Rs 100 and in multiples of Re 1 thereafter.
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The scheme will invest 75-100% in equity and equity related instruments, 0-25% in debt and money market instruments, 0-10% in units issued by REITs and InvITs.BNP Paribas Small Cap Fund
BNP Paribas Small Cap Fund is an open-ended equity scheme predominantly investing in small cap stocks. The new fund offer or NFO of the scheme will open for subscription on October 6 and it will close on October 20.
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The performance of the scheme will be benchmarked against Nifty Small Cap 250 TRI Index. The scheme will be managed by Shiv Chanani and Miten Vora.
The scheme will invest 65-100% in equity and equity related instruments of small cap companies. 0-35% in equity and equity related instruments of other than small cap companies, 0-35% in debt and money market instruments, 0-10% in units issued by REITs & INvITs, and 0-10% in units of mutual fund scheme.
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The scheme will follow a bottom-up approach to pick stocks across the sectors based on the quality of the business model and quality of management. The fund manager will look at both value and growth stocks in picking out individual companies.
Groww Nifty Total Market Index Fund
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Groww Nifty Total Market Index Fund is an open-ended scheme replicating/tracking Nifty Total Market Index. The new fund offer or NFO of the scheme is open for subscription and it will close on October 17.The performance of Groww Nifty Total Market Index Fund is benchmarked against the Nifty Total Market Index (Total Return Index). The scheme will be managed by Anupam Tiwari.
The investment objective of the scheme is to achieve a return equivalent to the Nifty Total Market Index-TRI subject to tracking error. This index is diversified throughout the Indian market across sectors and market caps and aims to benefit from India’s economic growth.
The minimum application amount is Rs 1000 and in multiples of Re1 for purchases and of Re 0.01 for switches.
The scheme will invest 95-100% in equities and equity related securities covered by Nifty Total Market Index, and 0-5% in debt, and money market instruments.
WOC Balanced Hybrid Fund
WhiteOak Capital Balanced Hybrid Fund is an open-ended balanced scheme investing in equity and debt instruments.
The new fund offer or the NFO of the scheme will open for subscription on October 5 and it will close on October 19. The scheme will re-open for continuous sale and repurchase within five business days from the date of allotment.
The performance of the scheme will be benchmarked against CRISIL Hybrid 50+50 Moderate Index. The scheme will be managed by Ramesh Mantri (equity investments), Trupti Agrawal, Piyush Baranwal (debt investments), and Shariq Merchant (overseas investments).
The investment objective of the scheme is to provide long term capital appreciation and generate income by investing in a balanced portfolio of equity and equity related instruments and debt and money market securities.
The minimum application amount is Rs 500 and in multiples of Re 1 thereafter. The minimum investment amount for weekly, fortnightly, and monthly SIP is Rs 100 (plus in multiple of Re 1) with minimum six instalments. The minimum application amount for quarterly SIP is Rs 500 (plus in multiple of Re 1) with minimum four instalments.
The scheme will invest 40-60% in equity and equity related instruments (including foreign securities), and 40-60% in debt securities (including securitized debt) and money market instruments, cash, and cash equivalents and / or units of domestic liquid mutual fund schemes.
Should you invest?
Should you invest in these NFOs? We typically ask investors to avoid investing in NFOs unless they offer something unique. The uniqueness could be that the scheme is offering an investment option that is not available in the market or offering something extra to an existing option. Otherwise, we believe investors are better off with an existing scheme with a long performance record. This is because you have some historical data to base your investment decision. You don’t have any data when it comes to new offerings.
Groww Nifty Total Market Index Fund is the first total market index fund in the market. Clearly, you have to rely on the performance record of the index. If you believe the index has the potential to offer superior returns, you may invest in the scheme. Nifty Total Market - TRI has a record of one year. It offered 18.51% in the last one year.
Edelweiss Multi Cap Fund and Baroda BNP Paribas Small Cap Fund, as you might have already guessed, are a new multi cap and small cap fund launched by the respective fund houses. There are schemes with performance record in both the categories.
There are around eight schemes in the multi cap category. The multi cap category with new investment mandate of 25% investments in three major market capitalisations was introduced in September 2020. That means, these schemes have a performance record of a little over three years. Nippon India Multi Cap Fund, the topper in the category, offered 38.95%. Quant Active Fund offered 32.46%. Mahindra Manulife Multi Cap Fund offered 31.35%. Four schemes offered more than 25% in a three year horizon and ITI Multi Cap Fund offered the lowest return of around 22%.
In the small cap category, there are around 10 schemes that have a performance record of around 10 years. Nippon India Small Cap Fund gave the highest return of around 29.73%. SBI Small Cap Fund gave 27.10%. DSP Small Cap Fund gave 25.81%. Four schemes gave around 20%. Aditya Birla Sun Life Small Cap Fund and ICICI Prudential Smallcap Fund gave 19.13% and 18.59% respectively. Quant Small Cap Fund gave the lowest return of around 17.74%.
WhiteOak Capital Balanced Hybrid Fund is a balanced hybrid fund. There is only one scheme - 360 ONE Balanced Hybrid Fund - in the category which is relatively new in the market. The scheme was launched in September. Mutual funds can launch either balanced schemes or aggressive hybrid schemes. Since many fund houses already had aggressive hybrid schemes, many couldn’t launch balanced schemes. If the asset allocation appeals to you, you can consider investing in these schemes once they build a performance record.
( Originally published on Oct 03, 2023 )
