This Mutual Fund invests in Recently Listed IPO’s and generated 50% returns in 1 year

Edelweiss Recently Listed IPO Fund - Mutual Fund invests in recently listed IPOsThis Mutual Fund invests in Recently Listed IPOs or upcoming IPOs

Many of us would have been applying for good IPOs, however no luck with the allotment of shares. Good IPOs have always rewarded investors with listing gains and post listing too. If you are disappointed with not getting IPO allotment and not sure whether you can invest in any IPOs post listing or not, this article is for you. In this article we would discuss about a mutual fund scheme that invests only in recently listed IPOs and generated over 50% returns in the last 1 year.

Also Read: Are you investing in these Top 10 Mutual Funds for 2022?

About Edelweiss Recently Listed IPO Fund

The investment objective of this mutual fund scheme is to invest in recently listed 100 companies or upcoming Initial Public Offers (IPOs).

This fund was launched in Feb-2018, almost 4 years back.

One can invest a minimum of Rs 5,000 in lump sum or Rs 500 per month through SIP for 12 months.

Its current AUM is over Rs 1,000 Crores.

Its current expense ratio is 1.01%.

This fund is benchmarked with India Recent 100 IPO TRI.

Performance of Edelweiss Recently Listed IPO Fund

Below is the performance.

Returns in last 1 year – 53%

Annualised returns in last 3 year – 35%

Annualised returns since inception of Feb-2018 – 22%

1 Lakh invested 1 year back has turned 1.5 Lakhs now.

1 lakh invested 3 years back has turned to 2.5 Lakhs  now.

10K SIP invested for 3 years – Investment would have been Rs 3.6 Lakhs and this value would have grown to Rs 6.8 Lakhs by now.

Risk Statistics of the Edelweiss Recently Listed IPO Fund

This fund has a low beta of 0.79. Beta refers to the volatility of the fund compared to its benchmark. Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has an alpha of 15.25. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Where does Edelweiss Recently Listed IPO Fund invest?

It currently invests 77% in equity, 13% in debt and holds the balance in cash. Below are the details of the portfolio.

Top Stocks and Sectors portfolio

Edelweiss Recently Listed IPO Fund - Portfolio summary

Which Sector IPOs does this mutual fund is investing now?

Edelweiss Recently Listed IPO Fund - Sector wise portfolio

Top IPO Stocks this mutual fund scheme is investing now

Edelweiss Recently Listed IPO Fund - Top Holdings

Edelweiss Recently Listed IPO Fund - Top Holdings-2

Why should you invest in Edelweiss Recently Listed IPO Fund?

Here are some reasons to invest.

1) This fund invests in recently listed 100 IPOs or upcoming IPOs. If you are IPO lover and been getting disappointed that you are not getting allotment of shares or confused whether to invest or not post listing of the IPOs, then you can consider this fund for investment.

2) This fund strategy is to invest in new age businesses that are getting listed in Indian market. Such opportunities provide good returns.

2) This fund has performed well and generated over 50% returns in the last 1 year. We all know that recent listed IPO’s has given handsome returns to investors.

Risk Factors in this Mutual Fund that invests in IPO

Here are some negative or risk factors.

1) This fund was originally incorporated as “Edelweisss Maiden Opportunities Fund Series-1” in Feb-2018. However, this fund announced fundamental attributes are changing + name change from Edelweiss Maiden Opportunites Series-1 to Edelweiss Recently Listed IPO Fund w.e.f. 29-June-2021. Hence it has a short term history in IPO investments.

2) This fund generated almost zero returns for 2.5 years from inception of the fund. The majority of the returns what you are seeing are generated in the last 1.5 years.

3) There is an exit load of 2% if redeemed within 180 days.

4) The fund can invest in any IPOs and there could be loss post listing e.g. Nuvoco Vistas IPO is currently trading at 10% below listing price. Similarly Tarsons Products listed at 27% on listing day, however, now trading at 17% lower from day-2 to today.

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Should you invest in Edelweiss Recently Listed IPO Fund?

This mutual fund has changed the fundamental attribute and fund name to recently listed IPO fund 6.5 months back.

Investors have always been worrying about not getting allotments for good IPOs. There is also an ambiguity among investors, whether one should invest in listed IPOs or avoid. This fund provides an opportunity to invest in such case.

However, one should also understand that it has short term performance history in IPO investments. Also, we could see such IPO craze only for few continuous quarters. We could see this trend in the last 5 years.

Investors should consider all these positives and negatives and invest in this recently listed IPOs or upcoming IPO mutual fund scheme.

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Suresh KP

2 comments

  • Surendhran Sivalingam

    How MF get IPO always when retail doesn’t get it? What’s the logic behind?

    • Surendhran, We all invest through “retail” quota” which can be very small. MFs invest through DII quota which is generally large in size. Also this fund invests even after listing from stock market too.

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