Aditya Birla Sun Life Special Opportunities Fund NFO – Is this fund something special?
Aditya Birla Sun Life is planning to launch the Special Opportunities Fund. This new fund offer would open for subscription on October 5, 2020. This is an open ended equity scheme that follows special situations theme and invests in opportunities that arises corporate restructuring, Government policy changes, etc. Is it something special that creates value to an investor’s portfolio? Should you invest in Aditya Birla Sun Life Special Opportunities Fund NFO? What are the various risk factors associated with such funds?
Issue details of Aditya Birla Sun Life Special Opportunities Fund (NFO)
Here are the NFO issue details.
|Scheme reopens for continuous purchase/sale||After 5 working days from closure of NFO|
|Scheme Plans||Direct and Regular
Growth and Dividend
|Minimum investment (Lumpsump)||Rs 500|
|Minimum investment (SIP)||Rs 500 / 6 months|
|NAV of the fund||Rs 10 during NFO period|
|Exit Load||0.5% if exited within 3 months|
|Max Total expense Ratio (TER)||2.25%|
|Benchmark||S&P BSE 500 TR Index|
What is the investment objective of this MF scheme?
The investment objective of the scheme is to provide long term capital appreciation by investing in opportunities presented by special situations such as corporate restructuring, Government policy change and/or regulatory changes, companies going through temporary but unique challenges and other similar instances.
There is no assurance or guarantee that the investment objective of the scheme will be realized.
Who is the Fund Manager of Aditya Birla Sun Life Special Opportunities Fund?
Fund managers are Mr. Anil Shah and Mr. Chanchal Khandelwal.
What is the benchmark for this scheme?
The benchmark for this scheme is S&P BSE 500 TR Index.
What is the allocation pattern in this mutual fund?
This fund investment pattern is as follows:
1) It invests 80% to 100% in equity & equity related instruments of special situations theme. The risk profile in this segment is high.
2) It would invest 0% to 20% other equity & equity related instruments. The risk profile in this segment is High.
3) It would invest 0% to 20% debt, units of mutual fund schemes, money market instruments and cash & cash equivalents. The risk profile in this segment is Low to medium.
4) It would invest 0% to 10% in units issued by REITs and InvITs. The risk profile in this segment is medium to high.
Why to invest in the Aditya Birla Sun Life Special Opportunities Fund?
Here are a few reasons to invest in such mutual fund schemes.
1) The MF invests in special opportunities that arise due to corporate events, government policy changes, etc. There is no other category of mutual funds to tap such opportunities.
2) This fund also aims to tap such special opportunities that are existing post covid-19 as there are no restrictions either on market cap nor sector.
Some key risk factors you should consider before you invest in such funds
One should consider some of these risk factors / negative factors before investing.
1) It invests in special opportunities that may arise during specific events of the companies. This would limit the capability of the fund to invest in other themes / sectors.
2) It invests based on special opportunities theme where such opportunities could be high in one period and lower in another period. The returns could highly fluctuate.
3) Since this scheme invests in specific opportunities for companies in special situations, hence concentration risk is very high.
4) It invests in REITS and InvITs which are considered as high risk.
5) You can refer complete risk factors before investing in this fund.
Performance of existing Special Opportunities Funds
There were a few of the funds which were special opportunities that got merged / categorized to other category post SEBI re-categorization of funds in 2018.
Aditya Birla Sun Life Special Opportunities Fund – Should you invest?
Aditya Birla Sun Life Special Opportunities Fund invests based on a special situations theme. These opportunities may be high post covid-19 and there could be a limited number of opportunities in future. The returns can significantly fluctuate year on year. One should also invest for atleast 5 years to see some returns. Investors can avoid such funds and invest in equity funds or sector funds (where one would have clarity about how a particular segment of sector can perform in near future).
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