Mahindra Unnati Emerging Business Yojana Midcap NFO – Should you invest?

Mahindra Unnati Emerging Business Yojana Midcap NFO – Should you invest-minMahindra Unnati Emerging Business Yojana Midcap NFO – Should you invest?


Mahindra Mutual Funds is coming up with a new fund, Mahindra Unnati Emerging Business Yojana mutual fund scheme. Mahindra Unnati Emerging Business Yojana Midcap fund (NFO-New Fund Offer) would open for subscription on 8th January, 2018. This midcap mutual fund would invest in midcap companies in India. This post is based on request is based by “poor mallaiah but rich one day” on suggest a topic on our blog. What are the features of Mahindra Unnati Emerging Business Yojana Midcap Mutual Fund scheme? What is the investment strategy of Mahindra Unnati Emerging Business Yojana Midcap Mutual Fund scheme? What are the positives and risk factors in Mahindra Unnati Emerging Business Yojana NFO? Should you invest in such new midcap mutual fund schemes?

Also Read: Best Mutual Funds that can give high returns with low risk in 2018

Features of Mahindra Unnati Emerging Business Yojana Midcap Mutual Fund scheme


Mahindra Mutual Funds is launching this new fund, Mahindra Unnati Emerging Business Yojana NFO which is a midcap mutual fund scheme.

1) Mahindra Unnati Emerging Business Yojana NFO Opens on 8th January, 2018.

2) This mutual fund is open ended mutual fund scheme.

3) This NFO Closes on 22nd January, 2018. However, since it is open ended, it would reopen for subscription from 6th February, 2018.

4) There is no entry load applicable in this New Fund Offer.

5) There is exit load of 1% if you sell the mutual fund units before 365 days.

6) This mutual fund scheme invests in various midcap companies in India.

7) Minimum amount to be invested is Rs 1,000 and in multiples of Rs 10 there-off. There is no maximum limit.

8) Fund would offer regular and direct plans. Like any other mutual fund, this fund would also offer growth and dividend options.

9) Fund manager of this midcap fund is Mr.Ratish Varier.

10) The Scheme performance would be benchmarked against S&P BSE Midcap Index.

Where are the objectives of Mahindra Unnati Emerging Business Yojana Fund?


The investment objective of the Scheme is to seek to generate long term capital appreciation and provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities and derivatives predominantly in mid cap stocks. However, there can be no assurance that the investment objective of the Scheme will be achieved.

Where will Mahindra Unnati Emerging Business Yojana Fund invest?


It invests majorly in midcap companies and some exposure to non-midcap and debt instruments. Here is the break-up:

1) Equity and related securities in midcap companies – 65% to 100%. They are high risk.

2) Equity and related securities in non-midcap companies – 0% to 35%. They are high risk.

3) Debt and money market instruments – 0% to 35%. They are low to medium risk.

4) Units issued by REIts and InvITS – 0% to 10%. They are medium to high risk.

Who is eligible to invest in this New Fund Offer?


1) Indian Resident individuals either singly or jointly.

2) Hindu Undivided Family (HUF) through Karta.

3) Minor through parent / legal guardian.

4) Partnership Firms including limited liability partnership firms.

5) Sole proprietors.

6) Companies, Bodies Corporate, Public Sector Undertakings (PSUs.), Association of Persons (AOP) or Bodies of Individuals (BOI) and societies registered under the Societies Registration Act, 1860.

7) Banks (including Co-operative Banks and Regional Rural Banks) and Financial Institutions.

8) Religious and Charitable Trusts, Wakfs or endowments of private trusts.

9) Non-Resident Indians (NRIs) / Persons of Indian origin (PIOs) residing abroad on repatriation basis or on non-repatriation basis.

10) Foreign Portfolio Investors (FPIs) registered with SEBI.

11) Army, Air Force, Navy and other para-military units and bodies created by such institutions;

You may like: Best Portfolio Managment Services in India that gave upto 40% annualised returns

Who is not eligible to invest in this NFO?


1) Any individual who is a foreign national or any other entity that is not an Indian resident under the Foreign Exchange Management Act, 1999 (FEMA Act) except where registered with SEBI as a FPI or FII.

2) Overseas Corporate Bodies (OCBs)

3) NRIs residing in Non-Compliant Countries and Territories (NCCTs) as determined by the Financial Action Task Force (FATF), from time to time.

4) Residents of Canada as defined under the applicable laws of Canada

5) U.S. Person

What are the expected fund management expenses for this mutual fund scheme?


Mutual fund AMC is expecting the following expenses to be as part of fund management expenses.

1) Expenses towards investment management and advisory fees, trustee fees, audit fees etc., u/s 52(6) (C) (i) is estimated to be up to 2.5%

2) Additional expenses expected u/s 52 (6A) (c) – up to 0.2%

3) Additional expenses for gross inflows from specific cities – up to 0.3%

Reasons to invest Mahindra Unnati Emerging Business Yojana Midcap Fund


1) This mutual fund scheme exposure to midcap is up to 65%. Balance it can invest in large cap funds or small cap funds or debt instruments. Hence this scheme has flexibility to manage 1/3rd of the portfolio other than midcap companies.

2) Midcap companies are the potential stocks to become large cap; hence investment in such stocks can grow your money. Some of the best performing midcap mutual funds are the proof.

3) The returns from midcap stocks are very high compared to large cap or blue chip companies.

Reasons NOT to invest Mahindra Unnati Emerging Business Yojana Midcap Fund


1) This is new mutual fund scheme, hence cannot say how such fund would perform.

2) Investments in midcap stocks are very high risk. Your capital itself can reduce in case of stock market crash which happened several times in the last 3-10 years.

3) Fund management fees are expected between 2.5% to 3% which is high.

How to invest in this New Mutual Fund Offer?


If you already have the mutual fund account, login to your account and go to NFO/IPO section and apply for the same. If you do not have mutual fund account, you can contact your financial advisor and fill the paper form and apply for mutual fund scheme.

Mahindra Unnati Emerging Business Yojana Midcap – Should you invest?


There is nothing wrong in trying in new mutual fund offers. However, one should ask themselves, what is the objective of investing in such mutual fund scheme. If you think that this MF NAV is Rs 10 and want to invest, then you are wrong. There is no where it has proven that one should invest in Low NAV Fund. Like I always say, one should invest in consistent performing mutual funds which proved the performance in various market cycles. Invest in long term funds that have come out from severe market crashes and providing higher returns in the medium to long term. If there are already proven midcap mutual fund schemes in the market, why to try with new ones? Think, Think, Think…..

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Suresh

Mahindra Unnati Emerging Business Yojana Midcap NFO

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