Samco Launches Flexi Cap Fund – Should you invest in NFO of the new Kid in MF industry?

Samco Flexi Cap Fund – NFO Isue Details, Why to invest, Risk Factors and ReviewSamco Flexi Cap Fund – Issue Details, Risk Factors and Review

Samco Mutual Fund has launched Flexi Cap Fund. Samco Mutual Fund is a new kid in 37 Lakh Crore mutual fund Industry. It is promoted by Broker and Mutual Fund Distributor, Samco Securities. Samco Flexi Cap Fund opens for subscription on 17th January, 2022. It’s an open-ended fund that invests across market capitalization of stocks i.e., large caps, mid-caps, and small caps. This new fund will use a metric called “active share” that shifts from traditional benchmarking and focuses on heavily stress tested” companies. Should you invest in the Samco Flexi Cap NFO? What are the risk factors an investor should consider before investing in such Flexicap funds?

Also Read: Best Flexicap Mutual Funds in India

Samco Flexi Cap Fund – NFO Issue Details

Samco Flexi Cap Fund new fund offer would open for subscription on Monday, January 17, 2022 and closes on Monday, January 31, 2022. 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 17-Jan-22
Scheme Closes 31-Jan-22
Scheme reopens for continuous purchase / sale Within 5 business days
Minimum Lumpsum Rs 5,000
Minimum SIP Rs 500 for 12 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load 2% – Within 1 year
1% – Within 2 years
Nil – More than 2 years
Risk Very High Risk
Benchmark Nifty 500 Index TRI
Fund Manager Ms. Nirali Bhansali (Equity)
Mr. Dhawal Ghanshyam Dhanani
(Overseas investments)
Max TER 2.25%

Samco Flexi Cap Fund SID

What is the investment objective of Samco Flexi Cap Fund NFO?

The investment objective of the Scheme is to seek to generate long-term capital growth from an actively managed portfolio of Indian & foreign equity instruments 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
Indian Equity across market capitalization 65% 100% High
Foreign securities 0% 35% High
Tri-party Repo (TREPS) through CCIL 0% 35% Low

Why to invest in Samco 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, mid cap and small cap which would help investors for diversification.

2) This Flexi Cap fund will use a metric called ‘active share’ that shifts from traditional benchmarking and focuses on heavily stress tested” companies. Such test is conducted considering several key parameters like corporate governance, cash flow and balance sheet. Such parameters can help to short list the portfolio like 40-50 stocks from Top 100 companies in India.

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 have outstanding performance in 2020 and 2021. Hence, flexicap funds have high potential to perform in all market cycles.

5) Flexicap segment has historically given 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 mid cap stocks which are high risk.

2) This fund would invest up to 35% in foreign securities where there is geopolitical risk and currency risk.

3) While this is a new fund, this is the first MF scheme from Samco Mutual Fund AMC. One need to observe, how well the AMC and fund manager would manage in generating consistent returns.

4) Investors should read scheme information document (SID) for complete risk factors of the scheme.

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.

Scheme Name  3 Yrs 5 Yrs 10 Yrs
Parag Parikh Flexi Cap Fund 29.9% 23.0% NA
PGIM India Flexi Cap Fund 28.7% 21.9% NA
SBI Focused Equity Fund 23.8% 21.4% 20.2%
UTI Flexi Cap Fund 24.6% 21.3% 18.3%
IIFL Focused Equity Fund 28.8% 21.0% NA
Axis Focused 25 Fund 19.6% 20.4% NA
Canara Robeco Flexi Cap Fund 21.9% 20.3% 16.5%
DSP Flexi Cap Fund 22.5% 18.9% 17.1%
Edelweiss Flexi Cap Fund 18.4% 18.5% NA
Principal Focused Multicap Fund 21.2% 18.4% 16.6%
HDFC Retirement Savings Fund Equity Plan 21.0% 18.0% NA
Union Flexi Cap Fund 22.6% 18.0% 14.9%
JM Flexicap Fund 19.7% 17.9% 17.1%
UTI Children’s Career Fund 19.0% 17.5% 15.8%
Tata Retirement Savings Fund 15.9% 17.1% 15.8%
SBI Flexicap Fund 17.9% 16.5% 18.4%
Franklin India Focused Equity Fund 19.3% 16.4% 20.1%
IDBI Flexi Cap Fund 18.5% 16.2% NA
Nippon India Focused Equity Fund 19.1% 16.1% 19.7%
Franklin India Flexi Cap Fund 18.7% 16.1% 17.1%
Kotak Flexicap Fund Regular Plan 16.2% 16.0% 17.6%
IDFC Focused Equity Fund 15.5% 16.0% 12.5%
Aditya Birla Sun Life Flexi Cap Fund 17.7% 15.9% 18.5%
HSBC Flexi Cap Fund 17.7% 15.6% 15.8%
Quantum Equity FoF 16.7% 15.4% 16.4%
HDFC Flexi Cap Fund 15.7% 15.3% 15.8%
ICICI Prudential Focused Equity Fund 19.1% 15.2% 15.2%
IDFC Flexi Cap Fund 15.8% 14.5% 16.8%
L&T Flexicap Fund 14.1% 14.0% 14.3%
DSP Focus Fund 16.1% 13.9% 14.3%
ICICI Prudential Passive Strategy Fund (FOF) 15.4% 13.7% 12.5%
Tata Young Citizens Fund 18.8% 13.6% 13.0%
Motilal Oswal Flexi Cap Fund 10.9% 12.7% NA
Nippon India Retirement Fund – Wealth Creation Scheme 11.6% 12.2% NA
HDFC Focused 30 Fund 14.4% 12.1% 13.0%
LIC MF Flexi Cap Fund 14.3% 11.6% 11.8%
Taurus Flexi Cap Fund 10.6% 10.6% 11.4%

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Should you invest in Samco Flexi Cap Fund NFO?

Samco Flexi Cap Fund invests in various market capitalization i.e., in large cap, mid cap and small cap stocks in India. It also invests in foreign assets to the tune of 35%. Such funds can act like diversification of portfolio to investors. However, such funds can under perform in the short term and tend to perform better if invested in medium to long term.

Samco is new AMC in the MF industry and one need to observe how well they can manage the new scheme. They have already engaged 10% of the total distributors in India. They aim to increase this number to 20% and garner about Rs 5,000 crores with this new fund offer. For the first time in India, Samco will transparently disclose daily active shares to Indian investors.

If you are a high risk investor, you can invest in this scheme. Alternatively, if you do not want to test with new funds, you can invest in existing Flexi cap mutual funds that has already proven their performance.

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Suresh KP

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