Canara Robeco Focused Equity Fund NFO – Should you Subscribe?
Canara Robeco Focused Equity Fund NFO – A Review
Canara Robeco Mutual Funds has launched new fund offer, Canara Robeco Focused Equity Fund that would open for subscription on 23rd April, 2021. This is an open ended mutual fund scheme that invest in largecap, midcap and smallcap, but with a limit of 30 stocks. This fund is like flexicap fund which invests across market capitalizations, but with a cap of 30 stocks. Should you invest in the Canara Robeco Focused Equity Fund NFO? How did focused funds performed in the recent past?
Canara Robeco Focused Equity Fund NFO Details
Canara Robeco Focused Equity Fund would open for subscription on Friday, 23rd April, 2021 and closes on Friday, 7th May, 2021. This is an open-ended mutual fund scheme. Here are the NFO issue details.
|Scheme reopens for continuous purchase/sale||18-May-21|
|Minimum Lumpsum||Rs 5,000|
|Minimum SIP||Rs 1,000 for 6 months|
|NAV of the fund||Rs 10 during NFO period|
|Exit Load||< 1 year – 1%
> 1 year – Nil
|Max expense Ratio (TER)||2.25%|
|Benchmark||S&P BSE 500 TRI|
What is the investment objective of Canara Robeco Focused Equity Fund NFO?
The investment objective of the scheme is to generate long term capital appreciation/income by investing in equity and equity related instruments across market capitalization of up to 30 companies.
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|
|Equity and Equity-related Instruments||65%||100%||Medium to High|
|Debt and Money Market Instruments||0%||35%||Low to Medium|
|Units issued by REITs and InvITs||0%||10%||Medium to High|
|Units of MF schemes||0%||5%||Medium to High|
|Equity Exchange Traded Funds||0%||10%||Medium to High|
Portfolio creation approach of Canara Robeco Focused Equity Fund
Why to invest in the Canara Robeco Focused Equity Fund NFO?
Here are a few reasons to invest in this fund.
1) This fund would be a concentrated portfolio of high quality and high growth companies across market cap which can benefit investors.
2) This focused fund would invest across market cap of largecap, midcap and smallcap and focuses only on 30 funds. This fund can work like flexicap mutual fund scheme.
3) Fund would invest in emerging stocks which could be potential largecap stocks in future.
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 is like a flexicap mutual fund, however with a cap of 30 funds overall. While this would invest in largecap, midcap and smallcap, there is no guarantee that it would meet objective of the fund. Flexicap funds can provide consistent returns compared to focused funds.
2) This fund would invest up to 40% in derivatives, which is high risk.
3) This fund invests some of the investments in debt instruments of corporates which is high risk.
4) This fund invests in REITs and InvITs which are high risk.
Performance of existing focused mutual fund schemes
There are a few focused funds already existing, let us check their performance.
|Fund Name||3 Year
|5 Year Annualised||10 Year Annualised|
|IIFL Focused Equity Fund||17%||18%||–|
|Axis Focused 25 Fund||11%||17%||–|
|Principal Focused Multicap Fund||13%||15%||12%|
|SBI Focused Equity Fund||11%||15%||16%|
|Nippon India Focused Equity Fund||10%||15%||15%|
|Franklin India Focused Equity Fund||10%||13%||15%|
|IDFC Focused Equity Fund||4%||13%||9%|
|ICICI Prudential Focused Equity Fund||11%||13%||11%|
|DSP Focus Fund||9%||12%||11%|
Should you invest in the Canara Robeco Focused Equity Fund NFO?
Canara Robeco Focused Equity Fund invests in largecap, midcap and smallcap with a cap of 30 stocks limit. Focused equity fund theme is not new. If you observe this theme of focused funds has given 9% to 18% annualized returns (baring IDFC focused fund which is under performer). High risk investors can invest in this scheme for medium to long term perspective. Short term investors or low to medium risk investors can avoid this fund.
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