Shriram Multicap Fund NFO – 2nd Fund from this AMC – Should you invest?
Shriram Multicap Fund NFO – 2nd Fund from this AMC – Review
Shriram Mutual Fund is launching its 2nd Mutual Fund Scheme in India. Shriram Multicap Fund New Fund Offer (NFO) would open for subscription on 7th September, 2018. Since the mutual fund AMC had only 1 MF scheme earlier and it is launching its 2nd scheme now, this is catching investor attention. What are the features of Shriram Multicap Fund NFO? What is the allocation pattern in the Shriram Multicap Mutual Fund? Should you invest in the Shriram Multicap Fund NFO? This article is based on request from various readers to write about this NFO.
Features of Shriram Multicap Fund NFO
This is an open-ended mutual fund equity scheme
This MF would invest in equity and equity related instruments across diversified sectors. There is no restriction on market cap and on the sector.
This MF would invest in large cap, Midcap and small cap stocks in India
This scheme has opened for subscription on 7th September, 2018
This scheme would close for subscription on 21st September, 2018.
Since this is an open ended scheme, it would again open for subscription from 8th October, 2018.
This scheme is available in both regular and direct plans.
This plan offers both growth option and dividend option.
This scheme is available for lump sum and SIP investment.
Minimum investment is Rs 5,000 and in multiples of Rs 1 there-off for lump sum investments.
Minimum investment is Rs 1,000 per month for monthly SIP and for a tenure of 6 months. Minimum investment is Rs 2,000 per quarter for quarterly SIP and tenure is for 6 months.
The NAV of the NFO is Rs 10 per unit now during initial subscription.
There is no entry load to invest in this mutual fund scheme.
If one wants to exit within 1 year from investment, there is an exit load of 1% of the invested value.
This scheme is classified as moderately high risk scheme.
This scheme benchmark is NIFTY 500.
Scheme total expense ratio (TER) is estimated up to 2.5% of the total assets on any day.
Shriram Multicap Fund NFO details can be downloaded from here.
Who is the Fund Manager of Shriram Multicap Fund?
The Fund Managers are Mr. Kartik Soral.
What is the investment objective and strategy of this Shriram Multicap Fund?
The primary investment objective of the scheme is to generate long term capital appreciation by investing in an actively managed portfolio predominantly consisting of Equity & equity related securities diversified over various sectors.
What is the allocation pattern in this mutual fund scheme?
This fund investment pattern looks as follows:
1) It invests 65% to 100% in equity and equity related instruments across various sectors. This risk profile in this segment is High.
2) It invests 0% to 35% in Debt markets and Money Market Instruments. This risk profile in this segment is Low.
What is the Fund management process & investment style?
The mutual fund follows a blend of value and growth style of investing. The fund will follow a bottom-up approach to stock-picking and choose the companies across sectors and market capitalizations. Each stock in the portfolio will have an investment rationale and capital allocation to each stock will be made based on top-down sector view, stock valuations, macro-economic factors and trends. Each stock will be monitored and reviewed regularly to confirm the investment rationale.
Where does the mutual fund scheme invest?
The mutual fund scheme would invest in the following:
a) Equity and Equity linked instruments of domestic companies / corporations.
b) Securities issued, guaranteed or supported by the Central Government or any state government (including but not limited to coupon bearing bonds, zero coupon bonds and treasury bills).
c) Securities issued by any domestic government agencies, quasi-government or statutory bodies, Public Sector Undertakings, which may or may not be guaranteed or supported by the Central Government or any state government.
d) Domestic non-convertible securities as well as non-convertible portion of convertible securities, such as debentures, coupon bearing bonds, zero coupon bonds, deep discount bonds, Mibor-linked or other floating rate instruments, premium notes and other debt securities or obligations of public sector undertakings, banks, financial institutions, corporations, companies and other bodies corporate as may be permitted by SEBI / RBI from time to time.
e) Domestic Commercial Paper (CP), Certificate of Deposits (CD), Bills Rediscounting, CBLO, Repos in Government Securities, and other Money Market Instruments as may be permitted by SEBI / RBI from time to time.
f) Domestic derivatives.
g) Deposits with domestic banks and other bodies corporate as may be permitted by SEBI from time to time
Can NRI invest in this Shriram Multicap Fund NFO?
Yes, they can invest in this scheme. They can invest in this mutual fund scheme on repatriation and non repatriation basis subject to approvals from RBI.
What is the tax treatment of the Shriram Multicap Fund?
As an investor, you might also want to know how Shriram Multicap Fund returns would get taxed. These would get taxed like any other diversified mutual fund.
1) As per latest income tax rules of 2018-19, dividends received from this fund are tax free in the hands of investors.
2) As per latest income tax rules of 2018-19, long term capital gains are taxed at 10% without indexation benefit over and above Rs 1 Lakh.
What is the one and only Shriram Mutual Fund Performing?
Its only fund named Shriram Equity Hybrid Fund has given 9.5% annualized returns in the last 3 years, 10% returns in the last 1 year and 12% returns since inception. This fund benchmark gave 14% annualized returns in the last 3 years, indicating that this fund is under performer.
What are the risks involved in this fund?
One should consider some of these risk factors before investing.
1) This mutual fund scheme invests in multi-cap portfolio up to 80%, which are high risk.
2) This is the second from Shriram Mutual Funds. First fund has given low returns, hence this AMC is yet to gain confidence among investors.
3) The performance of the scheme may be affected by the corporate performance, macro-economic factors, changes in Government policies, general levels of interest rates and risk associated with trading volumes, liquidity and settlement systems in the securities markets.
4) Low trading volumes, settlement periods and transfer procedures may restrict the liquidity of the scheme's investments.
How is the Performance of existing Multicap or Diversified Mutual Fund Schemes?
Currently there are already a bunch of multi-cap/diversified funds in the market, let us look at their performance.
1) SBI Focusssed Equity Fund: This fund invests in a diversified portfolio. This fund gave 24% annualized returns in the last 5 years, 16% annualized returns in the last 3 years, 19% returns in the last 1 year.
2) ICICI Pru Focused Equity Fund: This fund invests in a diversified portfolio of stocks. This fund gave 18% annualized returns in the last 5 years, 15% annualized returns in the last 3 years, 17% returns in the last 1 year.
3) Mirae Asset India Equity Fund: This fund invests in a diversified portfolio across various sectors. This fund gave 25% annualized returns in the last 5 years, 17% annualized returns in the last 3 years, 15% returns in the last 1 year.
Should you invest in the Shriram Multicap Fund?
Shriram Multicap Fund invests across various sectors in large cap, Midcap and small cap stocks. Shriram Mutual Funds AMC is yet to gain confidence among the investor community. Investors have 2 choices now. One to invest in this fund by taking risk. Second is instead of experimenting with new funds where they are yet to gain confidence, one can invest in existing Best multicap or diversified mutual funds. I would rather go with the second option in this case as there is limited performance (that too an under performance of the one and only single fund) from this AMC.
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Shriram Multicap Fund NFO Review