Aditya Birla Sun Life has launched Business Cycle Fund NFO which is open for subscription on November 15, 2021. It is an open-ended equity scheme. It will focus on riding the business cycle through dynamic allocation between different sectors and stocks at different stages of the business cycle in the economy
INVESTMENT OBJECTIVE
The investment objective of the scheme is to provide long term capital appreciation by investing predominantly in equity and equity related securities with a focus on riding business cycles through dynamic allocation between various sectors and stocks at different stages of business cycles in the economy.
INVESTMENT STRATEGY
The Fund would follow top down approach of portfolio construction to identify stage of business cycle, sector opportunities and subsequently using bottom up approach identify strong companies within those sectors.
The Scheme would aim to deploy the business cycle approach in investing by identifying economic trends and investing in the sectors and stocks that are likely to outperform at any given stage of business cycle. The fund manager will consider economic parameters (like Current Account Deficit, fiscal deficit, interest rates, inflation), investment indicators (like investment in capex, new projects cleared, etc.), business and consumer sentiment (purchasing manager index, business confidence index, sales of various consumer discretionary products, etc.) to decide on the expansion or contraction phase. For instance, during the early expansion phase, cyclical stocks tend to outperform. In the contraction period, the defensive groups or sectors that are less sensitive to changes in overall economic activity like healthcare, consumer staples, etc. outperform because of their stable cash flows and dividend yields.
BENCHMARK
The performance of the scheme will be benchmarked to the performance of S&P BSE 500 TRI).
ASSET ALLOCATION
Under normal circumstances, the asset allocation of the Scheme will be as follows:
Instruments | Risk profile | Normal Allocation (% of total Assets) |
Equity & Equity related instruments selected on the basis of business cycle | High | 80% - 100% |
Other Equity & Equity related instruments | High | 0% - 20% |
Debt and Money Market Instruments | Low to Medium | 0% - 20% |
Units issued by REITs & InvITs | Medium to High | 0% - 10% |
NFO Issue Details
Scheme Opens | 15-Nov-21 |
Scheme Closes | 29-Nov-21 |
Scheme reopens for continuous purchase/sale | Within 5 working days |
Minimum Lumpsum | Rs 500 |
Minimum SIP | Rs 100 for 6 months |
NAV of the fund | Rs 10 during NFO period |
Entry Load | Nil |
Exit Load | 1% if redeemed within 1 year |
Risk | Very High Risk |
Benchmark | S&P BSE 500 TRI |
Fund Manager | Mr. Vineet Maloo and Mr. Nitesh Jain |
Performance of existing Multicap Funds
Here is the performance of some existing business cycle funds. This would give an idea to investors on how these funds have performed in medium to long term. Returns indicated here are annualized returns.
Fund Name | 3 Mth Ret ( % ) | 6 Mth Ret ( % ) | 1 Yr Ret ( % ) | 3 Yr Ret ( % ) |
L&T Business Cycles Fund | 12.57 | 26.38 | 56.59 | 18.56 |
ICICI Pru Business Cycle Fund | 11.38 | 20.53 | - | - |
Tata Business Cycle Fund | 8.57 | - | - | - |
Baroda Business Cycle Fund | - | - | - | - |
Suitability
This product is suitable for investors who are seeking*
Investors looking for long-term Wealth Creation
Investors whose investment time horizon is five years or more, this scheme may be suitable for them.
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*Investors should consult their financial advisors if in doubt about whether the product is suitable for them
Note: The above information has been sourced from the Scheme Information Document provided by ABSL Asset Management. Read the entire document before investing, Disclaimer: Jaiprakash (ARN/Distributor - 70524; brand name Vasundhra Investment ) is the distributor of the mutual fund. Please consult your investment advisor before investing.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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