Fidelity India has come up with new equity fund called Fidelity India Value Fund. Lets do a review and analysis and get into finer details of the New Fund Offer.

The new fund offer (NFO) open for subscription from November 16 to December 15, 2009. The face value of the NFO will be Rs 10 per unit and offers growth option and dividend option. The dividend Option offers dividend payout and dividend re-investment. The minimum application amount is Rs 5000 per application. For additional purchase minimum application amount is Rs 1000. Entry Load – Nil, Exit load – 1% For redemption within 1 year.

Fidelity as a fund house is always my favorite fund house with good returns and Nitin Bajaj who will be the fund manager of Fidelity India Value Fund currently manages Fidelity India special situations fund and I have seen good track record of Fidelity India special situations fund.

The objective of this fund is to invest in undervalued stocks and will invest at least 80 percent of the assets in equities and the rest in exchange-traded funds, debt and money market instruments.

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Mirae Asset is coming up with something unique and they have filed offer document for a new fund – MIRAE Asset Korea Discovery Mutual Fund. This would be a fund of fund, which means that it will hold other mutual funds as its assets. The objective of the fund is to invest in Korean equities and it would be achieved by investing in the units of the Mirae Asset Korea Fund and asset allocation to this fund would be in range of 80-100%

The Mirae Asset Korea Equity Fund is benchmarked against the KOSPI index, so here is a chart of how KOSPI has performed over the last five years.

Advantages

• This is the first fund that offers Indian investors’ exposure to Korea.
• As Korea is also an emerging market like India and so you can get good diversification.

Disadvantages

• Double fees for the fund i.e. the fee of the fund itself plus the fee of the underlying fund.

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3. Axis Mutual Fund

SBI Fund house is coming up with new fund and they term it as SBI WISE fund where WISE stands for Winning Investment Strategies in Equities. So lets do a Review and Analyze and get into finer details of the New Fund Offer from SBI Fund House and see if this is something just named as WISE or is something unique and wise for investors.

Basics

The initial investment required for SBI WISE Fund is Rs.10,000 for the lumpsum investment, and Rs. 12,000 for the SIP purchase. As expected there would be no entry load, but there is an exit load of 1% if you exit within one year of allotment. This fund would invest 90% – 100% of its assets in equity and 0% – 10% of its assets in debt and money market instruments.

Analysis

Official Document filed at SEBI has quite a few unique things and one of them is investment objective and I quote

The objective of the scheme would be to provide investors with opportunities for long-term growth in capital through investments in equity and equity related instruments. The Scheme will invest in stocks which are the constituents of SGI WISE India Index, an index based on a quantitative model.

However there is no guarantee or assurance that the investment objective of the scheme will be achieved. The scheme doesn’t assure or guarantee any returns.

There is one interesting thing in the objective apart from no guarantee of returns and that is SGI ( (Société Générale Index ) WISE Index and as per the doc its defined as

Level 1: Screening of the Stock Universe

The universe is all the stocks listed on the NSE (National Stock Exchange). The screening is based on the following two parameters: -

• Market Capitalization: – The market capitalization of the stock chosen should be greater than INR 2500 crore
• Liquidity: – The 60-day average daily volume of the stock selected should be greater than INR 5 Crore

This screening results in a list of stocks which are primarily large cap and consists of the eligible potential Index constituents.

Level 2: Scoring Model/Methodology
After the screening, the resulting list of stocks is scored on the basis of the two sets of selection criterias: -

• Stock spot performance /earnings momentum – This would include stock specific aspects like price momentum of the stock, short term variation in the stock holdings by professional investors, future earnings momentum, etc.
• Fundamental/valuation parameters – This would include aspects based on a company’s Balance sheet & profit & loss account. The parameters are cash flow growth (estimated), Earning before Interest tax, Earning per share (EPS), Price to earnings ratio (PE), Enterprise Value etc

After every stock has been given a score, stocks which comprise the final Index constituents are selected from the top 33% of the stocks with the highest averaged score. The Investment Manager intends to make investments in constituents of SGI Wise India Index on an equal weighting basis.

Final Thoughts

Sounds something unique to investor but there are 2 things which worries me. First is of course there is nothing about the guarantee and capital preservation and secondly The SGI WISE India Index is the exclusive property of Société Générale (the “Index Sponsor” or “Société Générale”) and is to be licensed for use non-exclusively and so fund have to to pay fees. They have estimated the fees as 2.5% of the weekly average net assets of the scheme as expenses which investor would need to pay.

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Lets do a Review and Analysis and get into finer details of the New Fund Offer from Religare Fund House “Religare PSU Equity fund” and try to see if there is anything unique about this fund for us. Religare Mutual Fund has launched a PSU (Public Sector Undertakings) fund which will invest in Equity and Equity Related companies in few core sectors where the Central / State Government(s) has majority of it holding and the fund could benefit from divestment reforms taken by government in the near future.

The fund will invest 65 per cent of its assets in companies in the BSE PSU index and the remaining 35 per cent in other PSU companies.

Religare PSU Equity New Fund Offer opened on Tuesday September 29th 2009 and will close on October 28 2009. The fund offers both growth and dividend options. Entry load would be as per New SEBI Guidelines. Minimum application amount for lump-sum investment is Rs 5,000. For SIP investments, the minimum application amount is Rs 1,000. The minimum tenure for SIP enrolment is 6 months under the monthly option and four months under the quarterly option.

PSU Investment

I do not see any difference  when it comes to investing in PSU or any other public companies. Government has over time clearly stated that PSU’s would remain PSU’s and government would at least hold 51% of stake in those companies, so there is nothing much that is going to improve in those PSU’s but when it comes to technicals and sentiments I guess PSU companies can benefit and so PSU funds but instead of investing in Religare PSU fund I would prefer to invest in SBI PSU NFO ( coming soon ) because of SBI Fund House’s reputation and my personal preference.

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When UTI Bank was renamed as Axis Bank everyone thought why still we have UTI Mutual Fund and not renamed it to Axis Mutual Fund and may be because it was different entities owned differently. Axis Mutual Fund House will shortly be filing for both equity and debt products. These offerings should be available by October / November of this year.

As I read on moneycontrol.com Rajiv Anand, MD & CEO of Axis AMC said and I quote

We are very pleased to have received SEBI’s approval. The Asset Management Industry in India is amongst the fastest growing financial services businesses from across the globe. With a growth rate of over 30% CAGR during the last 6 years, the mutual fund business presents an interesting opportunity.

Lets see if I can have some funds by them into my ebook soon or its just yet another Mutual Fund House with average performance is what we need to wait and see.

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Shinsei Industry Leaders Fund is an open-ended equity scheme which would invest in companies identified as industry leaders in sectors. Industry leaders are companies which has attained a major market share and possesses the potential to maintain or increase its market share in one or more products or services within its sector.

The new fund offer (NFOs) open for subscription from July 27 to August 25, 2009. The fund will re-opens for purchase and sale on or before September 24, 2009. The fund will invest 65-100% in equity and equity related securities of companies identified as industry leaders.

Shinsei Mutual Fund is new Fund house coming up with NFO which sounds interesting from the definition ( as industry leaders ) but if you analyze deeply it would be more like a Large Cap Fund. This is because normally industry leader is the largest company in the sector with very few exceptions and the benchmark for this fund is also BSE-100 and so it would not be wise enough to invest in NFO for this new fund house.

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Yet another mutual fund house has hit the market with its NFO or New Fund Offer and here I am once again with my views on the fund. The Canara Robeco Asset Management Company has launched its NFO called the Canara Robeco F.O.R.C.E Fund.

Canara Robeco Asset Management Company

Even if you are one of the individual who does regular investment in mutual funds there are chances that you may not have heard about the Canara Robeco Asset Management Company but they have 5 star rated Infrastructure fund and Tax saver fund.

Canara Robeco FORCE Fund

So now lets analyze how good is this Canara Robeco FORCE Fund and see what it offers. Is there anything new or unique for the investors? Should we invest in this fund or not ?

The NFO for Canara Robeco FORCE Fund opened on July 20, 2009 and will close on August 18, 2009 and so there is some more time as of now to decide on the fund but sooner the better.

As I get it the fund is mainly concentrating on Banking, Financial Services and Insurance or in short BFSI, Entertainment and Retail. The Asset allocation as I read in newspaper would be like

• BFSI – Minimum of 40% and a maximum of 65%
• Entertainment – Minimum of 15% and a maximum of 35%
• Retail – Minimum of 10% and a maximum of 25%

Final Thoughts

Personally I am very bullish on Entertainment as a sector and specially DISH TV, Network 18 and to an extent Sun TV. BFSI Sector has outperformed in the recent past. However, Indian Retail industry has not taken big strides till date and we have seen Reliance Fresh issues of opening malls and Subhiksha virtually down and out. So it would be investors call if he should go for the fund or not but my vote is to go with the fund if you have a good long term view.

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Yet another NFO is hitting the market and so here I am once again with my views on it. As usual we will analyze how good is Kotak Select Focus Fund NFO and whether we should invest in Kotak Select Focus Fund.

I could not find very detailed information about where and in which sectors this fund would be investing but the only information available is it will invest 65%-100% in equities and equity-linked instruments and up to 35% in debt securities. This suggests that the fund is not very aggressive with 35% allocated in debt securities.

Looking at the investment objective:

The investment objective of the scheme is to generate long-term capital appreciation from a portfolio of equity and equity related securities, generally focused on a few selected sectors.

It looks like fund is more concentrating on long term gains and the benchmark for the fund is S&P CNX Nifty.

Finally this would be a good fund which may outperform depending on the three fund managers’ choice of stocks and it could be good investment considering current market condition which is very much suitable to the fund objectives of cautiousness.

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Once again we have an NFO Closing coming soon and there are lots of questions as to whether we should invest in Franklin build India Fund or not and how good will this fund be and so here is my personal view on the fund.

Franklin build India Fund is one more infrastructure fund which would invest in Infrastructure related companies. Its investment profile would be 65%-100% in infrastructure related companies and rest in other companies in Financial Services, Banks and  Agriculture.  So major focus will be on Infrastructure but would cover almost everything.

Recently we saw Reliance Infrastructure Fund NFO. Now we have Franklin build India Fund which is also in the same line with nothing unique about it apart from big banners all over the street. It looks like all the fund houses are running after Infrastructure as a sector and trying to convince the investors “This is the right time to invest in Indian Infrastructure”.

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As the NFO closing date is approaching for DSP Blackrock World energy fund I have been getting lots of emails about my views on  DSP Blackrock World Energy Fund and should they invest in the fund or not. In this Article I would analyze how good is DSP BlackRock World Energy Fund in NFO stage and whether DSP BlackRock World Energy Fund offers anything unique for the investors or its just yet another fund.

Now the first thing you should understand is DSP Blackrock World Energy Fund is not just a fund but its a fund of fund. What it means is DSP Blackrock World Energy Fund would not directly invest into any companies or stocks but it would invest in other related funds. Scheme has mentioned that it would invest in BlackRock Global Funds – World Energy Fund & BlackRock Global Funds – New Energy Fund but scheme document also states that they can invest in any other Global funds apart from BlackRock Global Funds – World Energy Fund & BlackRock Global Funds – New Energy Fund depending on the view of the investment manager.

Now both the funds are Global Funds and also other schemes where this fund would invest would be Global Funds and so there can be uncertainty and preferably losses for currency movements as well.

Pros and Cons of fund.

1. Gives your portfolio an international exposure
2. Is a Global fund of fund concentrating on Energy.
3. It is unique in its own kind because we do not have any fund of fund in energy sector.
4. It has forex loss factor associated.

Now its the call of investor if he wishes to invest.

As a personal view of mine I would not be investing DSP Blackrock World Energy Fund NFO because

1. I have never been FAN of NFO.
2. For international exposure I would prefer Fidelity International Oppurtunity Fund.
3. For investing in Energy fund I would go with Sundaram BNP Paribas Energy Opportunities Fund.

But depending on the performance of the fund in the future can consider this to be added into my portfolio.

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If you are into stock market you should be watching CNBC-TV18 at times and no matter how less you watch that channel you would always see the ad by Reliance Mutual Fund about its new fund offer Reliance Infrastructure Fund. My understanding is – Ad expenses would definitely come from the pocket of the customers who invest money into the fund and would definitely effect the opening NAV of the fund.

As per the Ads company is suggesting this is the right time to invest in infrastructure sector but the actual investment would be done not later than 30 days from the closure of New Fund Offer Period which closes on 23rd Jun and so it should be close to 23rd July when you get to see your NAV. I am not very upbeat to wait for one month to invest in infrastructure fund because the impact of the Budget and any run-up to the budget expectation would be missed. This also means you miss the disappointment as well though.

If you would like to invest in Infrastructure fund I would put my money on either Tata Infrastructure Fund or ICICI Prudential Infrastructure Fund where they have given good returns for a good period of time and not Reliance Infrastructure Fund.

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Key Features I like
1. Sundaram BNP Paribas Financial Services Opportunities Fund is an open ended equity scheme which would be investing in banking, finance and money market related companies.
2. The sector which has very good growth track record
3. Good track record for the Sundaram BNP Paribas.
4. Good fund manager track record.

No related posts.