Trust MF Flexi Cap Fund NFO – This scheme invests in companies by identifying potential ‘Gorilla companies’ …

Trust Mutual Fund has launched Flexi Cap Fund NFO. This open-ended fund invests in large-cap, mid-cap, and small-cap stocks.  In the last 5 years, flexicap mutual funds generated 18% average returns across mutual fund schemes. The hard truth is that some of the flexicap funds generated below bank FD interest rates too till last year, however thanks to bull market, we could see the higher returns now. The brochure of the fund indicates that its aim is to invest in identifying potential ‘Gorilla Companies’ that are rare, dominant, and unchallenged. Should you invest in Trust MF Flexi Cap NFO? This article would provide NFO details, investment strategy, who can invest, risk factors, performance of existing flexicap funds and our view about this NFO.

Also Read: This Large & Midcap Mutual Fund turned 1 Lakh to 8.3 Lakhs in last 10 years

TrustMF Flexi Cap Fund – NFO Issue Details

Here are the NFO details.

Fund Name TRUSTMF Flexi Cap Fund
NFO Opens 05-Apr-24
NFO closes 19-Apr-24
Scheme reopens for continuous purchase/sale Within 5 working days
Minimum Application Amount Rs  1,000 and in multiples of Rs  1 thereafter
Minimum SIP Rs 1,000 for 6 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load 1% if redeemed in 180 days
Risk Very High Risk
Benchmark NIFTY 500 TRI
Fund Manager Mihir Vora
Aakash Manghani

Trust MF Flexi Cap Fund SID Prospectus

What is the investment objective of Trust MF Flexi Cap Fund NFO?

To provide long-term growth in capital and income to investors, through active management of investments in a diversified portfolio of equity and equity-related securities across the entire market capitalization spectrum and in debt and money market instruments.

However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.

Trust MF Flexi Cap Fund NFO – Issue Details and Review

What is the allocation pattern in this fund?

This fund invests pattern is as follows:

Type of instruments Min % Max % Risk Profile
Equity & equity related instruments of large cap, midcap and smallcap
65% 100% Very High
Debt and Money Market Securities 0% 35% Low to Medium
Units issued by REITs and InVITs 0% 10% Very High

Why to invest in Trust MF Flexi Cap Fund NFO?

Here are a few reasons to invest in this fund.

  • Flexicap funds have ability to invest across market cap i.e. large-cap, midcap and smallcap stocks.
  • Mitigates risk with such portfolio diversification.  Earlier, we have recommended 3 Flexicap Funds as part of Most Recommended Mutual Funds.
  • This fund brochure indicates that it invests in companies by spotting potential Gorilla companies which are rare, dominant and unchallenged.
  • We have observed in the past that while large-cap stocks provide stable returns, mid cap and small-cap stocks tend to provide superior returns. Hence flexi-cap funds with such combination have potential to generate higher returns. Just see the below chart taken from Trust MF Flexi-cap Fund brochure.

Largecap, midcap and smallcap returns - Last 15 Years Data - 2006-2023

Risk Factors in Trust MF Flexi Cap Fund NFO

One should consider some of these risk factors / negative factors before investing.

  • This fund invests in midcap and small-cap stocks which are high risk.
  • Investing in small-cap stocks can have liquidity issues.
  • Recently SEBI has asked AMCs to do stress tests for their midcap and smallcap funds on how quickly they can liquidate their stocks. Some of the midcap and small-cap funds stress test showed longer term for liquidating their midcap and small-cap stocks.

How is the performance of existing Flexi Cap funds?

Below is the performance of the flexi-cap mutual fund schemes.

Scheme Name 3 Yrs 5 Yrs 10 Yrs
Quant Flexi Cap Fund 35% 30% 24%
Parag Parikh Flexi Cap Fund 24% 24% 20%
JM Flexi Cap Fund 28% 23% 20%
PGIM India Flexi Cap Fund 18% 21%
Union Flexi Cap Fund 21% 20% 15%
HDFC Flexi Cap Fund 28% 20% 18%
Franklin India Flexi Cap Fund 23% 19% 18%
Edelweiss Flexi Cap Fund 22% 19%
Canara Robeco Flexi Cap Fund 18% 18% 16%
DSP Flexi Cap Fund 17% 18% 17%
HSBC Flexi Cap Fund 21% 17% 16%
Aditya Birla Sun Life Flexi Cap Fund 18% 17% 18%
Kotak Flexi Cap Fund 18% 16% 18%
Axis Flexi Cap Fund 15% 16%
Navi Flexi Cap Fund 19% 16%
Tata Flexi Cap Fund 17% 16%
Shriram Flexi Cap Fund 20% 16%
SBI Flexi Cap Fund 17% 16% 18%
Bandhan Flexi Cap Fund 18% 15% 15%
UTI Flexi Cap Fund 10% 14% 15%
Motilal Oswal Flexi Cap Fund 17% 14%
LIC MF Flexi Cap Fund 16% 14% 12%
Taurus Flexi Cap Fund 18% 13% 12%

Should you invest in Trust MF Flexi Cap Fund NFO?

Trust MF Flexi Cap Fund invests across market capitalization i.e. in large cap, mid cap and smallcap stocks.

On the positive side, large cap stocks provide stable returns and the midcap / small cap stocks have potential to generate higher returns. Such funds can help to diversify an investor’s portfolio. Check This Flexi Cap Mutual Fund turned 1 Lakh to 9.2 Lakhs in last 10 years.

On the negative side, its exposure to midcap and smallcap segment is high risk.

High risk investors can invest in such funds for medium to long term perspective. Alternatively, one can invest in existing flexicap mutual funds that have already proven its performance in various market cycles.

Suresh KP

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