Mahindra Manulife Flexi Cap Fund (NFO) – Review
Mahindra Manulife Mutual Funds has launched Flexi Cap Fund which opens for subscription on 30th July, 2021. It’s an open-ended fund that invests across market capitalization of stocks i.e., large caps, mid-caps, and small caps. There is flood of flexi cap funds in recent times. Last month ICICI Mutual funds has lauched flexicap fund. Few days back, Nippon India has launched flexi cap fund. Many investors believe that a single Flexicap fund itself can act like a diversified portfolio. Should you invest in Mahindra Manulife Flexi Cap NFO? What are the risk factors an investor should consider before investing in such Flexicap funds?
Mahindra Manulife Flexi Cap Fund – NFO Issue Details
Mahindra Manulife Flexi Cap Fund new fund offer would open for subscription on Friday, 30th July 2021 and closes on Friday, 13th August 2021. This is an open-ended mutual fund scheme and would re-open for subscription after the initial subscription period. Here are the NFO issue details.
| Scheme Opens | 30-Jul-21 |
| Scheme Closes | 13-Aug-21 |
| Scheme reopens for continuous purchase/sale | 25-Aug-21 |
| Minimum Lumpsum | Rs 1,000 |
| Minimum SIP | Rs 1,000 for 6 months |
| NAV of the fund | Rs 10 during NFO period |
| Entry Load | Nil |
| Exit Load | 0.5% if redeemed before 3 months |
| Risk | Very High Risk |
| Benchmark | NIFTY 500 Index TRI |
Mahindra Manulife Flexi Cap Fund SID
What is the investment objective of Mahindra Manulife Flexi Cap Fund NFO?
The investment objective of the scheme is to generate long term capital appreciation by investing in a diversified portfolio of equity and equity-related securities across market capitalization.
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 fund?
This fund investment pattern is as follows:
| Type of instruments | Min % | Max % | Risk Profile |
|---|---|---|---|
| Equity and Equity related Instruments | 65% | 100% | High |
| Debt and Money Market Securities (including TREPS (Tri-Party Repo), Reverse Repo) | 0% | 35% | Low to Medium |
| Units issued by REITs and InvITs | 0% | 10% | Medium to High |
Why to invest in Mahindra Manulife Flexi Cap Fund NFO?
Here are a few reasons to invest in this fund.
1) Flexi cap mutual funds would invest across market caps i.e., in large cap, midcap and small cap stocks which would help investors for diversification.
2) There is no limit on market cap, and it has large universe of stocks for investment.
3) While investment in large cap would provide stable returns, investment in midcap and small cap funds would provide opportunity to invest in multibagger stocks that can generate high returns.
4) As indicated in our previous articles, historically we have observed that market cap outperformance tends to occur in phases. E.g., Large cap performed well in 2018-2020. Midcap and small cap stocks zooming in the last few quarters. Hence, flexicap funds have high potential to perform in all market cycles.
5) Flexicap segment has historically gave high rolling returns.
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 flexicap scheme would invest in small cap and midcap stocks which are high risk.
2) This fund would invest up to 50% in derivatives which is high risk.
3) This mutual fund would invest up to 35% in debt instruments which have turned to be riskier these days.
4) It invests up to 10% in InvITs and REITs which are high risk.
5) Since this is new fund, there is no past performance. One cannot guess how such fund would perform in the medium to long term.
6) Investors should read scheme information document (SID) for complete risk factors of the scheme.
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How is the performance of existing Flexi Cap funds in India?
Below is the list of top flexicap mutual funds and their performance in the last 3 to 10 years (returns are annualised).
| Scheme Name | 3 Yrs | 5 Yrs | 10 Yrs |
|---|---|---|---|
| Parag Parikh Flexi Cap Fund | 22.6% | 20.8% | – |
| IIFL Focused Equity Fund | 23.3% | 18.7% | – |
| PGIM India Flexi Cap Fund | 22.8% | 18.4% | – |
| Axis Focused 25 Fund | 13.2% | 17.3% | – |
| UTI Flexi Cap Fund | 18.1% | 17.2% | 15.6% |
| DSP Flexi Cap Fund | 18.6% | 17.0% | 14.1% |
| Canara Robeco Flexi Cap Fund | 17.1% | 17.0% | 13.9% |
| HDFC Retirement Savings Fund Equity Plan | 18.3% | 16.8% | – |
| SBI Focused Equity Fund | 17.3% | 16.2% | 16.6% |
| Principal Focused Multicap Fund | 17.4% | 15.5% | 13.5% |
Should you invest in Mahindra Manulife Flexi Cap Fund NFO?
Mahindra Manulife Flexi Cap Fund invests in various market capitalization i.e., in large cap, midcap and small cap stocks in India. Such funds can act like diversification of portfolio to investors. However, such funds can under perform in short term and tend to perform better if invested for medium to long term. If you are high risk investor, you can invest in this scheme. However, consider it only for medium to long term. If you don’t want to test with such new funds, you can opt for some of the top flex-cap mutual funds that have a proven track record.
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Dear Suresh ji,
Will you please release article on latest top flex-cap mutual funds that have a proven track record, however, if you have already published, please share the link & oblige.
Please also guide how to search required topic from your website – myinvestment ideas.com, thank you.
Warmly,
Sanjeev
I wrote and this is in draft stage as there are many articles in queue. It would be posted once this IPO / NFO rush is over.