NFO Analysis – MAHINDRA TOP 250 NIVESH YOJANA
Mahindra Mutual Fund, a relatively young mutual fund house has launched a new open ended equity scheme ‘Mahindra Top 250 Nivesh Yojana’. The fund is already opened for subscription on December 6 and will close for subscription on December 20, 2019.
The fund will fall in the large and mid-cap category. The Large and Mid-cap category of mutual fund has performed well in the last one year. They benefitted from the stability of large-cap exposure and late run up by mid-cap stocks. The funds in this category has on an average generated returns in double digit in the last one year. Next year too, large-cap may keep their performance intact at least in the first half of the year.
Objective: The investment objective of the scheme is to seek long-term capital growth through investments in equity and equity-related securities of both large-cap and mid-cap stocks. According to the SEBI, the definition of large-cap and mid-cap stocks is those stocks that are within the Top 250 stocks by market cap. The fund will close for subscription on December 20, 2019.
In terms of specific exposure, the fund will have a minimum of 80 per cent investment in equity and equity-related securities, which can go up to a maximum 100 per cent. The exposure to both the large-cap companies and mid-cap companies should be in the range of 35-65 per cent. The Scheme performance would be benchmarked against the NIFTY Large Midcap 250 TRI Index.
Strategy: The scheme is not tilted towards any particular strategy and depending upon the market conditions and outlook, it will adopt growth or value approach while investing. A top down and bottom up approach will be used to invest in equity and equity-related instruments. Meanwhile, the Investments would be based on the Investment Team’s analysis of business cycles, regulatory reforms, competitive advantage and so on. The fund manager in selecting stocks will focus on the fundamentals of the business including profitability, the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company, valuation and the key earnings drivers. The Scheme will maintain a diversified portfolio spread across the various industries in order to mitigate the concentration risk.
Fund Manager: The Scheme will be managed by V. Balasubramanian, Chief Portfolio Strategist (Equity) – Mahindra Asset Management Company Pvt. Ltd. Other funds are also managed by him. To name a few-Mahindra Mutual Fund Kar Bachat, Yojana, Mahindra Unnati Emerging Business Yojana, Mahindra Rural Bharat, Consumption Yojana and Mahindra Pragati Bluechip Yojana.
Looking at the other funds managed by the fund manager and fund house, we do not recommend investing in the scheme. However, you can invest in funds with a longer history.