Mahindra Top 250 Nivesh Yojana Fund – Should you invest?

Mahindra Top 250 Nivesh Yojana Fund Review

Mahindra Top 250 Nivesh Yojana Fund Review


Mahindra Mutual Funds have come up with Top 250 Nivesh Yojana Fund that invests in Top 250 companies in India (Largecap + Midcap). This fund would open for subscription on 6th December, 2019 and would close by 20th December, 2019. There are several Large-Midcap mutual funds that has outperformed and gave almost 17% returns in just 1 year. Hence it might catch your attention, whether one should invest in such large-midcap mutual fund. What are the features of Mahindra Top 250 Nivesh Yojana Fund? Should you invest in Mahindra Top 250 Nivesh Yojana Mutual Fund Scheme?

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Features of Mahindra Top 250 Nivesh Yojana Fund


This is an open-ended mutual fund equity scheme.

This scheme would open for subscription on 6th December, 2019

This scheme would close for subscription on 20th December, 2019.

Since this is an open ended scheme, it would again open for subscription after 5 business days from the date of allotment of Mf units after the NFO period.

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 1,000 and in multiples of Rs 1 there-off for lump sum investments.

Minimum investment is Rs 500 per month for monthly SIP and for a tenure of 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.

There is an exit load of 1% if the mutual fund units are redeemed within 1 year.

This scheme is classified as MODERATELY HIGH risk scheme.

Scheme total expense ratio (TER) is estimated up to 2.6% (2.25%+ 0.35%) of the total assets on any day.

Mahindra Top 250 Nivesh Yojana Fund Draft details can be downloaded from here.

What is the investment objective and strategy of Mahindra Top 250 Nivesh Yojana Fund?


The investment objective of the mutual fund scheme is to seek long term capital growth through investments in equity and equity related securities of both large cap and mid cap stocks. However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved.

Who is eligible to invest in this new mutual fund scheme?

The following is eligible to invest in this new fund.

1) Resident individuals, either singly or jointly.

2) Minors through Parents/ Legal Guardian.

3) Hindu Undivided Family (HUF) through its Karta.

4) Partnership Firms in the name of any one of the partners.

5) Proprietorship in the name of the sole proprietor.

6) Companies, Body Corporate, Societies, Association of Persons, Body of Individuals, Clubs and Public Sector Undertakings registered in India if authorized and permitted to invest under applicable laws and regulations.

7) Banks

Complete list of eligible participants who can invest can be checked in prospectus of this new fund offer.

Who is the Fund Manager of Mahindra Top 250 Nivesh Yojana Fund?


The Fund Manager is Mr. V Subramanian.

What is the benchmark for this scheme?


The benchmark for this scheme is NIFTY Large Midcap 250 TRI.

What is the allocation pattern in this mutual fund scheme?


This fund investment pattern is as follows:

1) It invests 35% to 65% in equity and equity related securities of Large Cap Stocks. The risk profile in this segment is medium to high.

2) It invests 35% to 65% in equity and equity related securities of Midcap Stocks. The risk profile in this segment is medium to high.

3) It invests 0% to 30% in equity and equity related securities of stocks other than large cap and midcap segment. The risk profile in this segment is medium to high.

4) It invests 0% to 20% in debt and money market instruments. The risk profile in this segment is low to medium.

5) It invests 0% to 10% in units of REITs and InvITs. The risk profile in this segment is medium to high.

Can NRI invest in this MF scheme?


Yes, they can invest in this scheme. They can invest on repatriation or non repatriation basis.

Why to invest in the Mahindra Top 250 Yojana Nivesh Fund?


Here are a few reasons to invest in this fund.

1) This fund invests in large cap stocks that has good potential to grow in the medium to long term.

2) This mutual fund invests in mid-cap stocks. Experts believe that today’s midcaps are tomorrow’s large caps. Hence, investing in midcap stocks for long term of 8-10 years have always rewarded investors.

3) The combination of large cap and midcap stock investment would help to balance the fund which would help to avoid going overboard on one particular sector.

Major risk factors you should consider before investing in such funds


One should consider some of these risk factors / negative factors before investing.

1) The fund invests in mid-cap stocks which may perform worse in short to medium term. Currently we are already seeing this downfall in midcap sector.

2) It invests up to 65% in equity and equity related instruments of large cap + midcap that are high risk. In case of stock market correction, such funds can take a huge beating.

3) This fund invests in REITs and InvITs which are high risk.

How is the Performance of Large-Midcap Mutual Funds in India?


Now, let us look at existing Top 5 Large-midcap mutual funds based on last 5 years returns.

#1 – Mirae Emerging Blue-chip Fund: This mutual fund gave 16% annualized returns in the last 5 years and 14% annualized returns in the last 3 years and 14% returns in the last 1 year.

#2 – Quant Large and Midcap Fund: This mutual fund gave 12% annualized returns in the last 5 years and 7% annualized returns in the last 3 years and 8% returns in the last 1 year.

#3 – Canara Robecco Emerging Equities Fund: This mutual fund gave 12% annualized returns in the last 5 years and 12% annualized returns in the last 3 years and 8% returns in the last 1 year.

#4 – Sundaram Large and Midcap Fund: This mutual fund gave 12% annualized returns in the last 5 years and 14% annualized returns in the last 3 years and 13% returns in the last 1 year.

#5 – Principal Emerging Blue-chip Fund: This mutual fund gave 12% annualized returns in the last 5 years and 10% annualized returns in the last 3 years and 5% returns in the last 1 year.

If you observe, this segment has been performing well in the last 5 years.

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Should you invest in the Mahindra Top 250 Nivesh Yojana Fund?


Mahindra Mutual Fund Top 250 Nivesh Yojana Fund wants to encash the opportunities in both large cap and midcap segment. Investing in Large-Midcap mutual fund is a good idea. However, one should note that new funds do not have past performance, hence difficult to say whether this fund would perform well in future or not. If you want to take risk, you can invest in such funds now. Alternatively, you can invest in some of the Best Large-Midcap Mutual Funds that are already existing and proven the performance in the last 5-10 years.

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Suresh KP

Mahindra Top 250 Nivesh Yojana Fund NFO Review

Suresh KP

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