Samco has launched the Special Opportunities Fund. This new fund offer would open for subscription on May 17, 2024. This is an open ended equity scheme that follows special situations theme and invests in opportunities that arises such as restructuring, turnarounds, spin-offs, mergers & acquisitions, new trends, etc. Is it something special that creates value to an investor’s portfolio? Should you invest in Samco Special Opportunities Fund NFO? What are the various risk factors associated with such funds? Let me review all these aspects in this article.
Also Read: 10 Mutual Funds to invest for next 10 years
Issue details of Samco Special Opportunities Fund (NFO)
Here are the NFO issue details.
| Fund Name | Samco Special Opportunities Fund |
| NFO Opens | 17-May-24 |
| NFO closes | 31-May-24 |
| Scheme reopens for continuous purchase/sale | Within 5 working days |
| Minimum Application Amount | Rs 5,000 and in multiples of Rs 1 thereafter |
| Minimum SIP | Rs 500 for 12 months |
| NAV of the fund | Rs 10 during NFO period |
| Entry Load | Nil |
| Exit Load | 2% for redemption Within 365 days |
| Risk | Very High Risk |
| Benchmark | NIFTY 500 TRI |
| Fund Manager | Mr. Umeshkumar Mehta Mr Paras Matalia Mr. Dhawal Dhanani |
Samco Special Opportunities Fund SID
About Samco Special Opportunities Fund
Samco Special Opportunities Fund is built on unique proprietary DISRUPTION model which has 10 distinct sub-strategies, each designed to uncover special situations within diverse themes. The fund capitalizes on market inefficiencies, aiming for long-term capital growth through undervalued or overlooked opportunities.
What is the investment objective of this scheme?
The investment objective of the scheme is to achieve long-term capital appreciation by investing in a portfolio of securities that are involved in special situations such as restructuring, turnarounds, spin-offs, mergers & acquisitions, new trends, new & emerging sectors, digitization, premiumization, and other special corporate actions. These situations often create mispricings and undervalued opportunities that the fund aims to exploit for potential capital appreciation. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.
There is no assurance or guarantee that the investment objective of the scheme will be realized.
What is the allocation pattern in this mutual fund?
This fund invests pattern is as follows:
| Type of instruments | Min % | Max % | Risk Profile |
|---|---|---|---|
| Equity & Equity related instruments of special situations theme | 80% | 100% | Very High |
| Equity and Equity related securities of other Companies | 0% | 20% | Very High |
| Debt and Money Market Instruments | 0% | 20% | Lowto Moderate |
Why to invest in the Samco Special Opportunities Fund NFO?
Here are a few reasons to invest in such mutual fund schemes.
- Diversification: By investing in a portfolio of stocks involved in special situations such as restructurings, turnarounds, mergers & acquisitions, etc., the mutual fund scheme offers diversification benefits, spreading risk across different sectors and strategies.
- Tapping Mispricings and Undervalued Opportunities: Special situations often lead to mispricings and undervalued opportunities in the stock market. The scheme’s objective to tap such situations indicates an active management approach to seek out potential gains where market inefficiencies exist.
- New Trends and Emerging Sectors: Investing in new trends, emerging sectors, and digitization can offer the potential for high growth opportunities, as these areas often represent industries with significant innovation and disruption potential.
- Potential for Enhanced Returns: By focusing on special situations that often create mispricings and undervalued opportunities, the scheme may offer the potential for enhanced returns compared to traditional investment strategies.
Some key risk factors you should consider before you invest in such funds
One should consider some of these risk factors / negative factors before investing.
- Special Situations Risk: Special situations such as restructurings, turnarounds, mergers & acquisitions, etc., can be inherently risky and may not always result in positive outcomes. These situations may fail to materialize as expected or may not generate the anticipated returns, leading to losses for investors.
- Liquidity Risk: Securities involved in special situations may have lower liquidity compared to more traditional investments. This lack of liquidity can make it difficult to buy or sell securities at desired prices, potentially resulting in price slippage or the inability to exit positions quickly.
- Concentration Risk: The scheme’s focus on specific sectors, trends, or special situations may lead to concentration risk. If a particular sector or theme underperforms, the portfolio’s performance could be significantly impacted.
- Regulatory and Legal Risk: Changes in regulations or unexpected legal developments can impact the securities held in the portfolio or the fund’s ability to execute its investment strategy. Regulatory changes may also affect the tax treatment of investments, potentially reducing returns.
- You can refer complete risk factors at Samco Special Opportunities Fund NFO RHP.
Performance of existing Special Opportunities Funds
There are a few funds that came in the last 3 years and here is the performance history. These are annualised returns.
| Scheme Name | 1Y | 2Y | 3Y |
|---|---|---|---|
| Aditya Birla Sun Life Special Opportunities Fund | 46% | 23% | 20% |
| Axis Special Situations Fund | 36% | 20% | 17% |
Also Read: 6 High-Return Low-Risk Mutual Funds as per ValueResearch
Samco Special Opportunities Fund NFO – Should you invest?
Samco Special Opportunities Fund invests based on a special situations theme such as restructuring, mergers & acquisitions, and emerging sectors. With a focus on exploiting mispricings and undervalued opportunities, the scheme aims to deliver enhanced returns by leveraging professional management expertise and flexibility in adapting to changing market dynamics.
On the negative side, despite the potential for capital appreciation, investing in this scheme carries inherent risks. Special situations investing comes with market risk, concentration risk, and liquidity risk, with investments prone to fluctuations and potential loss of value.
High risk investors who understand all these risks can invest in such schemes for medium to long term perspective.
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Dear Sir your articles are value able
Samco is running two funds already
Samco active momentum fund
Samco balanced advantage fund
Kindly give thanks in advance opinion of past performance of these two funds
Hello Dr. Both these funds are launched < 1 year, hence difficult to assess as one need to check their performance over various market cycles to asset the performance of the mutual fund