New fund offers are gaining popularity just like the equity mutual funds. In August 2024, the mutual fund industry saw new fund offer (NFO) inflows totaling Rs 13,815 crore, spread across 18 NFOs. This was a decrease from the Rs 16,565 crore invested in 15 NFOs in July 2024. Of the 18 NFOs launched in August 2024, 5 were thematic funds, with 1 falling under the large cap category. Remarkably, thematic funds accounted for a significant 73.8% of the total NFO flows in August 2024.
Here are three more NFOs that were floated this week.
1. HDFC Nifty LargeMidcap 250 Index Fund
> The HDFC Asset Management Company introduced the HDFC Nifty LargeMidcap 250 Index Fund on September 20, 2024, with the closing date set for October 4, 2024. This new fund is designed to mirror the performance of the Nifty LargeMidcap 250 Total Returns Index.
> The HDFC Nifty LargeMidcap 250 Index Fund offers a passive investment approach and is tailored for investors seeking diversified exposure to both large and mid-sized companies within a single fund.
> The fund offers diversified exposure by including stocks from both the Nifty 100 Index and Nifty Midcap 150 Index, with an equal distribution between large caps and midcaps.
> To maintain a balanced portfolio, the allocation is adjusted every quarter, ensuring a 50:50 exposure to both large and mid-sized companies. This strategy allows investors to benefit from the stability of established corporations while also taking advantage of the growth potential of smaller firms.
> Investors can contribute with a minimum amount of Rs 100 during the NFO period. There is no upper limit on investment.
> The fund will be managed by Nirman Morakhia and Arun Agarwal.
> The fund will provide diversified exposure across various sectors and market sizes by investing in 250 stocks. With a single fund, investors can easily access both large and midcap segments without the hassle of managing multiple investments. Quarterly resets are in place to prevent rebalancing from triggering taxable events.
Navneet Munot, MD and CEO of HDFC Asset Management Company, said, “With over two decades of expertise in Index Solutions, we are pleased to introduce this fund. It provides a unique opportunity to participate in India’s growth story.”
2. WhiteOak Capital Digital Bharat Fund
WhiteOak Capital Digital Bharat Fund, floated by WhiteOak Capital Mutual Fund, is open-ended equity scheme will primarily invest in technology and technology-related companies.
The primary objective of the Digital Bharat Fund is to achieve long-term capital appreciation by primarily investing in equity and equity-related instruments in the technology sector. The fund aims to leverage the swift advancements in digital technology that are revolutionizing multiple sectors in India.
Fund Allocation Strategy:
The fund’s portfolio allocation strategy dictates the following percentages:
80%–100% will be allocated in equity and equity-related instruments of technology and technology-related companies.
0%–20% will be allocated in equity and equity-related instruments of other companies.
0%–20% will be allocated in debt securities and money market instruments.
0%–10% will be allocated in units issued by REITs and InvITs.
Benchmark: The scheme’s performance will be measured against the BSE Teck TRI index.
Management Team:
The Digital Bharat Fund will be overseen by the following professionals:
Ramesh Mantri (Equity)
Trupti Agarwal (Assistant Fund Manager, Equity)
Dheeresh Pathak (Assistant Fund Manager, Equity)
Piyush Baranwal (Debt)
Investment Recommendation:
Investors aiming for long-term capital appreciation, particularly within the technology sector, might consider this fund as a potential investment opportunity.
However, it’s crucial to carefully evaluate your own risk tolerance and investment objectives before making any investment decisions.
3. LIC MF Manufacturing Fund
LIC Mutual Fund has launched the LIC MF Manufacturing Fund, which is an open-ended equity scheme focusing on the manufacturing sector. The NFO is open till October 4, 2024. Allocation of units is scheduled for October 11, 2024.
The primary objective of the LIC MF Manufacturing Fund is to secure long-term capital appreciation by strategically investing in equity and equity-related instruments of companies engaged in the manufacturing sector.
This Fund will strategically concentrate on various industries within the manufacturing sector such as automobiles, pharmaceuticals, chemicals, heavy engineering, metals, shipbuilding, and petroleum products, among others.
und Allocation Strategy for LIC MF Manufacturing Fund
The fund allocation strategy for the LIC MF Manufacturing Fund entails the following key aspects:
Equity Allocation: The fund aims to allocate 80%–100% of its portfolio in equity and equity-related instruments specifically tied to manufacturing companies.
Diversification: A percentage ranging from 0%–20% will be invested in equity and equity-related instruments of companies beyond the manufacturing sector, ensuring diversification within the portfolio.
Fixed Income Securities: A portion of 0%–20% will be dedicated to debt securities and money market instruments to enhance stability and income generation.
REITs and InvITs: A strategic allocation of 0%–10% will be made towards Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to tap into the potential of these alternative assets.
Benchmarking is against the Nifty India Manufacturing Index. The performance of the LIC MF Manufacturing Fund will be evaluated against the Nifty India Manufacturing Index (Total Return Index), thereby providing investors with a relevant benchmark to gauge the fund’s performance in the context of the manufacturing sector in India.
India’s economy is expanding at a significant pace, spurred by urbanization and various government initiatives aimed at boosting the manufacturing sector. One of the key programs driving this growth is the Production Linked Incentive (PLI) Scheme, alongside initiatives such as ‘Make in India’ and ‘Atmanirbhar Bharat’, which are strategically positioning India as a prominent player in the global manufacturing landscape. Against this backdrop, the LIC MF Manufacturing Fund has been designed to leverage these favorable conditions and capitalize on the promising opportunities for growth in the manufacturing sector.
R K Jha, Managing Director & CEO of LIC Mutual Fund, said: “India’s GDP growth, rising middle-class population, and export incentives are boosting demand for manufactured goods. Manufacturing will play a critical role in making India a $5-trillion economy by 2027. This fund aims to benefit from the positive outlook for the manufacturing sector.”