Should you invest in flexi funds?
As per the value research data, the flexi cap under the equity category has grown at 51.63% and 14.52% over 1 and 3 years as of July 19, 2021
From wealth managers to financial advisors, everyone has been recently suggesting why a flexi-fund should be a core part of your investment portfolio. Last year, Sebi came up with a category called flexi cap, where a fund manager puts a minimum of 65% of assets into equities and has the freedom to invest remaining assets across other market capitalisation without any restrictions.
This freedom is what makes the fund so attractive and so much so that the fund houses are lining up to launch these funds. Recently the NFO offered by ICICI Prudential flexi cap raised around Rs 10,000 crore, making it the highest amount raised by any active equity mutual fund house in history. The value research data shows that the flexi cap under the equity category has grown at 51.63% and 14.52% over 1 and 3 years as of July 19, 2021.
That being said, one of the leading mutual fund companies, Nippon India Mutual Fund (NIMF), has also announced the launch of Nippon India Flexi Cap Fund on July 20, 2021. The scheme is an open-ended dynamic equity scheme that offers a one-stop solution that captures the opportunities across market caps.
The strategy of the fund
The fund aims to create a long-term capital appreciation by investing in diversified portfolios across large, mid, and small caps on the back of market perspective and relative attractiveness.
Nippon India Flexi Cap Fund will be benchmarked against Nifty 500 TRI. Manish Gunwani will manage the fund who is the CIO – Equity Investments. Dhrumil Shah, Varun Goenka & Nikhil Rungta are the Co-Fund Managers and Kinjal Desai-Fund Manager Overseas. The New Fund Offer (NFO) opens on July 26, 2021 and closes on August 9, 2021.
Management view
As per the management, the fund will attempt to create Alpha through bottom-up stock selection and an appropriate allocation approach to identify opportunities in potentially high growth themes. The fund also aims to capitalise on the relative stability of large caps through reasonable allocations towards established leaders along with an optimal mix of the growth opportunities offered by the mid & small cap segment.
“The launch of Nippon India Flexi Cap Fund adds to our wide range of investor-centric products and deepens our offerings for the investor community. Flexi Cap is one of the largest categories in the Equity space. With Nippon India Flexi Cap Fund, we aim to deliver better returns by investing in best opportunities across market caps,” said Saugata Chatterjee, Co-Chief Business Officer, Nippon India Mutual Fund.
What should investors know?
-The fund falls under the category of ‘Very High’ under risk-o-meter, and hence investors should consult their financial advisors to check whether the product is suitable for them or not.
-The maximum total expense ratio (TER) would be 2.25% on the first Rs 500 crores of the daily net assets.
-10% of the units allotted can be redeemed without any exit load, on or before completion of 12 months from the date of allotment of units. However, any redemption over such limit in the first 12 months from the date of allotment shall attract a 1% charge as exit load.
-The minimum investment required is Rs 500 and in multiples of Re 1 after that.