Mahindra Manulife Focused 30 Equity Yojana Fund NFO Review and Analysis
Mutual fund houses are floating multicap / focused mutual funds in the last few months considering the volatility in the stock markets. Mahindra Manulife Mutual Funds are coming up focused equity fund that would open for subscription on October 26, 2020. This focused fund invests across market capitalization such as large cap, midcap and smallcap stocks i.e. multicap. This fund would invest a maximum of 30 stocks across market cap. What are the issue details of the Mahindra Manulife Focused 30 Equity Yojana Fund? Should you invest in the Mahindra Manulife Focused 30 Equity Yojana Fund NFO or avoid? Let us do the review of this fund in this article.
What are focused mutual funds?
As the name indicates, focused mutual fund focuses on a limited number stocks in a limited number of sectors, rather than holding a broad or diversified mix. Focused funds generally hold approx 20-30 companies or even less, unlike many other equity funds that hold more than 100 companies.
Mahindra Manulife Focused 30 Equity Yojana Fund (NFO) – Issue Details
This is an open ended equity scheme investing in maximum 30 stocks across market caps (i.e Multi Cap). Here are the NFO issue details.
|Mahindra Manulife Focused 30 Equity Yojana Fund NFO – Issue Details|
|Scheme reopens for continous purchase/sale||In 5 working days from closure of NFO|
|Minimum investment (Lumpsump)||Rs 1,000|
|NAV of the fund||Rs 10 during NFO period|
|Exit Load||1% if exited within 1 year|
|Risk||Moderate High Risk|
|Max Total expense Ratio (TER)||2.25%|
|Benchmark||NSE 500 TRI Index|
|Fund Manager||Mr. Krishna Sanghavi|
What is the investment objective of Mahindra Manulife Focused 30 Equity Yojana Fund?
The investment objective of the scheme is to generate long term capital appreciation by investing in a concentrated portfolio of equity & equity related instruments of maximum 30 companies across market capitalization.
There is no assurance or guarantee that the investment objective of the scheme will be realized.
Who is eligible to invest in this mutual fund scheme?
The following is eligible to invest in this scheme.
1) Resident adult individuals, either singly or jointly.
2) Minors through Parents/Lawful 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.
You can check the complete list of eligible investors in KIM / prospectus.
What is the allocation pattern in this mutual fund scheme?
This fund investment pattern is as follows:
|Type of instruments||Allocation %||Risk Profile|
|Equity and Equity related Securities||65% to 100%||High|
|Debt and Money Market Securities (including
TREPS (Tri-Party Repo), Reverse Repo)
|0% to 35%||Low to medium|
|Units issued by REITs & InvITs||0% to 10%||Medium to High|
Why to invest in the Mahindra Manulife Focused 30 Equity Yojana Fund?
Here are a few reasons to invest in such multi cap / focused mutual funds.
1) This focused fund would invest across large cap, midcap and small cap stocks. This provides wider scope of investment options.
2) This fund would focus on 30 stocks. Instead of having too many stocks, focusing on a limited number of stocks can provide greater control on the portfolio.
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) While investing in large cap stocks are risky, this focused fund would invest in small cap and midcap stocks that are high risk.
2) This fund invests up to 35% in debt instruments which are turned to be risky these days.
3) It invests up to 10% in REITs and InvITs which are high risk.
4) Fund manager has changed too many jobs (5 jobs in last 10 years). The mutual fund manager would know whether their strategy is working or not during 3 to 5 years of time frame. However, if there is change in fund manager too frequently it can affect the fund performance in medium to long term.
5) You can refer complete risk factors of investing in this particular scheme in SID / KIM / NFO prospectus.
How is the Performance of existing Focused funds in India?
Now, let us look at some of the top performing focused mutual funds so that one can understand how such segment is trending.
|Fund Name||6 month||Annualised Returns|
|1 Year||3 Year||5 Year|
|IIFL Focused Equity Fund||28.0%||11.4%||8.4%||11.8%|
|Axis Focused 25 Fund||25.5%||2.1%||6.1%||11.1%|
|SBI Focused Equity Fund||15.8%||1.0%||5.9%||9.4%|
|IDFC Focused Equity Fund||34.4%||13.0%||1.6%||8.6%|
|Principal Focused Multicap Fund||21.1%||7.0%||4.7%||8.0%|
|DSP Focus Fund||27.5%||0.2%||1.9%||6.1%|
|ICICI Prudential Focused Equity Fund||19.3%||4.8%||2.2%||5.8%|
|Nippon India Focused Equity Fund||26.8%||0.8%||-1.2%||5.6%|
|Franklin India Focused Equity Fund||14.2%||-7.3%||-0.6%||4.3%|
|HDFC Focused 30 Fund||16.4%||-11.7%||-5.5%||1.7%|
How to invest in this mutual fund?
After reading the positives and risk factors, if you have decided to invest in this scheme, you can invest in any of the following methods:
1) You can login to your mutual fund account and visit new fund offers sector and invest through the links provided
2) You can directly visit AMC website and invest with the instructions provided.
3) You can invest through third party mutual fund platforms like Mycams, Karvy mutual fund platform etc.,
4) You can approach any mutual fund broker.
Also Read: Best Multicap Mutual Funds to invest now
Should you invest in the Mahindra Manulife Focused 30 Equity Yojana Fund NFO?
Mahindra Manulife Focused 30 Equity Yojana Fund invests across large cap, midcap and small cap segment and focuses only for maximum of 30 stocks. This fund is for high risk investors as it invests in midcap and smallcap segments too. If you are a high risk investor and would like to test with new focused funds, you can invest. Otherwise, you can invest in some of the existing top performing focused mutual funds that had already proven its performance in the last 5-10 years.
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