Birla Sun Life Resurgent India Fund NFO – Series 2 – Should you invest?
Birla Sun Life Mutual fund is launching Series 2 of Resurgent India Fund NFO this week. Birla Sun Life Resurgent India Fund – Series 2 New Fund offer would open for subscription on 10th November, 2016. This is a closed ended mutual fund scheme for 3.5 years. What are the features of Birla Sun Life Resurgent India Fund Series 2 NFO? Who should invest in Birla Sun Life Resurgent India Fund Series 2 NFO? This article is based on request from Nitin on “Suggest a topic” option.
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Features of Birla Sun Life Resurgent India Fund – Series 2 NFO
This is close ended equity Mutual fund scheme.
Scheme opens for subscription on 10th November, 2016.
Scheme closes for subscription on 24th November, 2016. Since it is a close ended scheme, it would NOT reopen for further subscription.
This scheme is available in both regular and direct plans.
Like any other MF scheme, this scheme has both dividend and growth options. Under the dividend option, only dividend payout would be done.
Minimum investment is Rs 5000 and in multiples of Rs 10 thereof.
The NAV of the NFO is Rs 10 per unit during the subscription period.
This scheme has a maturity period of 3.5 years. Means you can redeem the units from mutual fund house only after 3.5 years. However, these are traded on stock exchange and you can sell them before 3.5 years in case there are buyers on the stock exchange.
There is no entry or exit load in this MF scheme.
Since it is only one time subscription, SIP option is not available in this mutual fund scheme.
This scheme is classified as moderately high risk mutual fund scheme.
This scheme benchmark is S&P BSE 200 Index.
Scheme expense ratio is estimated up to 2.5% of the total assets on any day.
What is the investment objective of this Birla Sun Life Resurgent India Fund NFO – Series 2?
The investment objective of this scheme is to generate long term capital appreciation through a portfolio of equity and equity related instruments that are likely to benefit from recovering in the Indian economy. It does not guarantee or indicate any returns. This scheme invests from 80% to 100% in equity & equity related instruments and 0% to 20% in cash, debt & debt related instruments.
Also Read: How to maximise returns from SIP in Mutual Funds?
What are the transaction charges if you wish to invest in this NFO?
If you wish to invest in the NFO, following transaction charges are applicable.
First time investors in mutual funds (across mutual funds) – Rs 150
Existing investors of mutual funds – Rs 100
What are the tax benefits available in this NFO?
This mutual fund scheme invests more than 80% in equity and equity related instruments, hence it is classified as an equity mutual fund.
Since the maturity period is 3.5 years, the returns received are for more than 1 year period, hence no income tax is applicable.
If you sell the mutual fund units before maturity on stock exchanges after 1 year from subscription, the returns are tax free.
If you sell the mutual fund units before maturity on stock exchanges before 1 year from subscription, short term capital gains would apply.
Can NRI invest in this mutual fund scheme?
NRI’s can invest in this mutual fund scheme on repatriation and non-repatriation basis.
How is the performance of Birla Sun Life Resurgent India Fund – Series 1 mutual fund scheme?
Since current mutual fund scheme is series-2, you would get doubts about how the fund is performing for Series-1. Let me give you some highlights of Series-1 of this scheme.
It was launched 2 months back i.e. 8-Sep-2016.
The current AUM of Series-1 scheme is Rs 119 Crores and this MF invests across various multi-cap stocks.
It had a maturity tenure of 1,275 days.
This MF scheme is currently trading at Rs 9.71 per unit.
This MF scheme NAV is down by 2.9% from launch date. It is down by 5.91% in last 1 month compared to 4% fall of BSE 200 benchmark index.
It invested in 30 stocks and top 10 stocks constitute to 30% of its total assets.
It invested in various sectors and top-3 sectors contribute to 50% of its total assets(Financial, construction and automobile).
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Should you invest in Birla Sun Life Resurgent India Fund – Series 2 NFO?
Generally, I would not advise for investors to subscribe for NFO in mutual funds as they are relatively new and fund performance is yet to be known. This is equity mutual fund which has maturity of 3.5 years. Many equity mutual fund schemes failed to provide returns during such short period. The main reason being, stock markets would react positive only during various cycles like political leadership changes, good economic growth etc., Such things would generally happen in 5-10 years span. Hence, I would advice investors to stay away from such NFO’s as of now. Alternatively, investors can invest in balanced mutual funds for 4-5 years tenure.
Birla Sun Life Resurgent India Fund – Series 2 New Fund Offer prospectus can be downloaded from here.
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Birla Sun Life Resurgent India Fund – Series 2 NFO
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Thank you for nice review and saving my money….