· It’s an open ended equity scheme predominantly investing in small cap stocks
· Minimum 65% of the asset allocation will be towards Equity & Equity related instruments of small cap companies
· Scheme to be benchmarked against S&P BSE 250 Small Cap TRI
· Scheme opens on 21st November 2022, closes on 5th December 2022 and reopens for continuous sale and repurchase from 14th December, 2022
Mahindra Manulife Mutual Fund, a joint venture of Mahindra & Mahindra Financial Services Limited (“Mahindra Finance”) and Manulife Investment Management (Singapore) Pte. Ltd. has announced its ‘New Fund Offer’ (NFO). The Scheme called Mahindra Manulife Small Cap Fund is an open-ended equity scheme predominantly investing in small cap stocks. This product is suitable for investors who are seeking long term capital appreciation and Investment predominantly in equity and equity related securities of small cap companies.
Small cap mutual funds have potential to create wealth and generate alpha over long term, as they provide exposure to companies which are potential market leaders in the industries they operate in and are likely to become future midcaps as they scale up. They are generally under-researched and under-owned, thus providing an opportunity for stock picking at reasonable valuations.
Anthony Heredia, MD & CEO, Mahindra Manulife Mutual Fund said, “The Indian economy is well poised and have potential to be one of the leading economies in the world over the coming decade. This may throw unprecedented opportunities across sectors and businesses, with many smaller companies using this possibility to become much larger over time. Small cap funds would be an ideal option for long term investors looking to take advantage of this change and should become a core part of investor portfolios. Given our past track record in looking at these companies across our diversified fund range, we feel this is the right time to bring this product to market, and help our investors realize their longer-term wealth creation aspirations.”
Krishna Sanghavi, Chief Investment Officer – Equity, Mahindra Manulife Mutual Fund said: “The investment objective of the fund is to generate long term capital appreciation by investing in a diversified portfolio of equity & equity related securities of small cap companies. Indian small caps offer a wide range of companies that are likely to participate and grow with Indian economy as India moves from 7th largest to 3rd largest economy in terms of size. The economy offers opportunities for many small cap companies to grow to be mid cap companies in future. Small caps as a segment also allows a wider choice in sector allocation. Valuation-wise, small caps currently offer a good opportunity for investors who want to build a long-term equity portfolio.”
About the Scheme
The Scheme will focus on creating an appropriate diversified portfolio of companies with a long-term perspective. The Scheme will invest a minimum of 65% of net assets in equity and equity related instruments of small cap companies. The scheme may take exposure in equity derivative instruments to the extent of 50% of the equity permitted component. Investment in derivatives shall be for hedging, portfolio balancing, and such other purposes as maybe from time to time under the regulations and subject to guidelines issued by SEBI/RBI from time to time.
The fund managers will be Mr. Abhinav Khandelwal and Mr. Manish Lodha, both having a vast experience in the field of equity research and fund management.
India has experienced some vital economic reforms in the past few years with a potential for future growth – right opportunity to capitalize on the emerging Indian entrepreneurship. The new digital infrastructure also looks quite optimistic. These few of the many factors look promising for the growth of small cap companies in India.
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