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.
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 companies |
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.
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.
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