Bank of India Mutual Fund announced the launch of the Bank of India Multicap Fund, an open-ended equity scheme investing in equity and equity-related securities across various market capitalisation. The scheme opens for public subscription on February 10th, 2023 and closes on February 24th, 2023. The scheme re-opens on March 06, 2023.
Q. What kind of mutual fund scheme is this?
This is an open-ended equity scheme that would invest in multiple stocks of varying market capitalization. However, there can be no assurance that the investment objective of the scheme would be achieved.
Q. What is the main objective of investing in this fund?
The investment objective of this actively managed equity fund scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity-related instruments across large-cap, mid-cap and small-cap stocks.
Q. Who can invest in this fund?
The scheme is suitable for investors looking for a single-product solution for equity investment. Apart, investors looking to invest across market cap categories may park their earnings in this fund.
Mohit Bhatia, CEO, Bank of India Investment Managers Private Limited (Investment Manager for Bank of India Mutual Fund) said, “Bank of India Mutual Fund is very pleased to announce the launch of an NFO after almost two years. We have always endeavoured to provide optimal Mutual Fund solutions keeping in view the varying needs of our existing as well as potential Mutual Fund investors in India. Given the positive and structural long-term strengths of Indian markets and with nature of volatility that is inherent in growth markets like India, we feel that a Scheme that invests across categories of large, small and mid-cap companies may provide a good opportunity for investors looking for long-term wealth creation.”
Alok Singh, CIO, Bank of India Investment Managers Private Limited further added, “Market volatility can be managed by diversification and a Multi Cap Fund by regulatory mandate invests a minimum 25% across each of large, mid and small-cap companies thus offering diversification across market caps in its portfolios. While large-cap compounders are likely to provide index-oriented returns, mid-cap companies and small-cap exposures are likely to provide Alpha creation opportunities in a multi-cap portfolio. The scheme will also endeavour to manage 25 per cent of the portfolio in a dynamic rules-based approach to allocate across market capitalisation based on medium-term trends and valuation metrics. This fund would be well suited for investors looking at exposure to growth-oriented equity funds with a minimum three to five years investment horizon.”
Q. How may one invest in this fund?
The minimum subscription amount is ₹5000, post which investors can put money in multiples of Re 1, thereafter. Once allotted, investors can park their earnings through both lump sum investments and systematic investment plans (SIPs).
The minimum investment you make through SIPs is ₹1000 and in multiples of ₹100, thereafter.
Investors can also park their earnings through a Systematic Transfer Plan (STP). The minimum investment you make through SIPs is ₹1000 and in multiples of ₹100, thereafter.
The NAV has been capped at ₹10 per unit during the NFO period.
Investors can select the SIP date as any date from the 1st to the 31st of a given month/quarter. In case the chosen date is not available on account of being a non-business day, the SIP will be processed on the immediate next business day
Both direct and regular plans are available, though the NAVs of the above options will be different and separately declared; the investment portfolio remaining the same. Each of the plans shall offer the following option(s):
- Growth Option
- IDCW Option (Re-investment of IDCW and payout of IDCW option).
Q. How will the scheme benchmark its performance?
The performance of the scheme is measured against the S&P BSE 500 Total Return Index.
Q. Are there similar mutual funds in the market?
This is not the first time that a multi-cap fund has been introduced to the market. Prior to this, many asset management companies (AMCs) in India have launched such funds in the past.
|Name of the fund||10-year returns (in %)|
|Baroda BNP Paribas Multi Cap Fund||34.27|
|Quant Active Fund||20.69|
|Invesco India Multicap Fund||18.03|
|Sundaram Multi Cap Fund||16.28|
|ICICI Prudential Multicap Fund||15.64|
|Nippon India Multicap Fund||15.29|
Q. Are investors allowed to redeem their mutual fund investments?
The Scheme will provide a continuous offer for the redemption of units at NAV-based prices subject to the applicable Exit Load given below commencing not later than five business days from the date of allotment. The Exit Load would be determined as under:
- For redemption/switch out up to 10% of the initial units allotted -within one year from the date of allotment: “NIL”
- Any redemption/switch out - in excess of the above-mentioned limit would be subject to an exit load of 1% if the units are redeemed/switched out within one year from the date of allotment of units
- If the units are redeemed/switched out after 1 year from the date of allotment of units: “Nil”.
The scheme will dispatch redemption proceeds within three working days from the acceptance of the redemption request or such other time as may be prescribed by SEBI from time to time.
Q. Who will manage this scheme?
Nitin Gosar will be the fund manager for the investments in this scheme.
Q. Does the fund contain any inherent risk?
The scheme has been labelled as containing “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to stay invested for a long period. However, investors must consult their financial advisers if in doubt about whether the product is suitable for them.