BNP Paribas Aqua Fund of Fund NFO – Review
BNP Paribas Funds has launched a new fund offer – BNP Paribas Funds Aqua Fund of Fund (FoF). This NFO would open for subscription on 16th April, 2021. This fund is an open ended scheme that invests in existing BNP Paribas Funds Aqua (Lux). The underlying fund generated 16% annualized returns in the last 5 years. BNP Paribas Aqua (Lux) Fund invests in companies that conduct their business in water and water related sectors. Should you invest in BNP Paribas Funds Aqua Fund of Fund (FoF) NFO? Can we expect similar past performance of 15% annualized returns in future?
BNP Paribas Funds Aqua Fund of Fund NFO Details
This is an open-ended mutual fund. This NFO would open for subscription on Friday, 16th April, 2021 and closes on Friday, 30th April, 2021. Here are the NFO details.
|Scheme reopens for continuous purchase/sale||Within 5 days from date of allotment|
|Minimum Lumpsum||Rs 1,00|
|Minimum SIP||Rs 300 for 6 months|
|NAV of the fund||Rs 10 per unit during NFO period|
|Exit Load||< 1 year – 1%
> 1 year – Nil
|Max expense Ratio (TER)||1.00%|
|Benchmark||MSCI World Index TR Index|
What is the investment objective of the BNP Paribas Aqua Fund of Fund?
The primary investment objective of the Scheme is to seek capital appreciation by investing predominantly in units of BNP Paribas Funds Aqua (Lux) mutual fund scheme.
However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.
What is the allocation pattern in this mutual fund scheme?
This fund investment pattern is as follows:
|Type of instruments||Min %||Max %||Risk Profile|
|Units of BNP Paribas Funds Aqua (Lux)||95%||100%||High|
|Money Market Instruments and/or units of Mutual Fund||0%||5%||Low|
Can NRI invest in this MF scheme?
NRIs (excluding who are residing in US and Canada) can invest in this scheme. They can invest on repatriation or non repatriation basis.
Why to invest in the BNP Paribas Funds Aqua Fund NFO?
Here are a few reasons to invest in this fund.
1) This underlying global mutual fund would invest in companies that conduct business in water and related sectors which are picked-up based on the quality of their financial structure and earnings potential. Such companies are picked-up across various countries. This is a unique mutual fund scheme and investing in such water related business.
2) The underlying fund has past history and generated 16% annualized returns in the last 5 years. It generated similar return in the last 12 years since inception of the fund. Investors can expect similar returns minus fund management fees as we could see consistency in the medium to long term.
Major risk factors you should consider before investing in such funds
One should consider some of these risk factors / negative factors before investing.
1) This underlying fund would invest in companies that are in the business of water and related sectors. There could be strict government controls related to water and this could potentially reduce the opportunities for this fund.
2) This fund would invest in an international mutual fund and there are geopolitical risks and forex risk.
3) This fund invests some of the investments in debt instruments of corporates which is high risk.
Top 10 Portfolio Holdings of BNP Paribas Aqua (Lux) Fund
Sectors in which BNP Paribas Aqua (Lux) Fund invests
Country / Region Exposure of BNP Paribas Aqua (Lux) Fund investments
How is the past performance of BNP Paribas Aqua (Lux) Fund?
Since BNP Paribas Aqua Fund would invest in underlying fund, let us check the performance of such fund.
Should you invest in BNP Paribas Aqua Fund NFO?
BNP Paribas Funds Aqua FoF invests in international fund that invests in companies which are into water and water related business.
While this fund is relatively new, it invests in a fund that has historical performance in the last 12 years. Underlying fund generated stable performance of 16% annualized returns in the last 5 years and similar performance in the last 12 years from launch date. While there was a bull run in the recent past, it posted 20% stable returns in the last 1 year.
Since it invests in international markets, this is a high risk fund. High risk investors can invest some portion of their portfolio in such schemes. Moderate risk to low risk investors should avoid such funds.
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