WhiteOak Capital Mutual Fund has launched its first equity new fund offer (NFO) called ‘WhiteOak Capital Flexi Cap Fund’. It is an open-ended dynamic equity scheme investing across large, mid, and small-cap stocks.
The New Fund Offering (NFO) will open on July 12 and close on July 26. The minimum investment that can be made in the fund is ₹500, the fund house said in a statement.
The AMC also plans to launch a global emerging markets fund for Indian investors after overseas investing limits are enhanced.
Prashant Khemka, the founder of WhiteOak Capital Management, was the CIO of Goldman Sachs Asset Management’s India Equity and Global Emerging Markets Equity businesses. WhiteOak Group manages over ₹40,000 crore of assets invested in India from investors globally.
Before we proceed, let us first deconstruct the concept of a new fund offer and flexi cap fund.
What is a new fund offer (NFO)?
A New Fund Offer (NFO) is the process through which an asset management company (AMC) creates a new fund on a first-subscription basis to facilitate the purchase of securities. The fund house collects funds from the general public through an NFO in order to buy securities such as equity shares, bonds, and other financial instruments on the market. As a newcomer to the market, NFO is less expensive than the current funds.
The mutual fund company that is introducing a new plan must make sure that at least 20 investors contributed to the money raised during the NFO. Additionally, to prevent the investment amount from being concentrated among a small number of investors, no one individual may own more than 25% of the scheme's corpus. Every NFO is required to abide by this guideline, which is also known as the 20-25 rule in the mutual fund industry.
What are flexi cap funds?
Flexi-cap funds are those funds that invest in businesses with market capitalizations ranging from large cap and mid cap to small cap. A flexi-cap fund enables investors to diversify their investment holdings among businesses with various market capitalizations, reducing volatility and risk. They are also known as multi-cap funds or diversified equity funds.
Flexi-cap funds can invest in any firm regardless of the company's market cap, unlike mid-cap or small-cap funds that concentrate on equities depending on market capitalization. Investors with a moderate to high risk appetite and a longer-term investment goal may find it to be excellent because it offers total flexibility to invest in firms across market cap buckets.
Fund strategy
The WhiteOak Capital flexi Cap fund will invest 65% or more of its net assets in equity—large, mid and small stocks. Moreover, the fund will focus on building a well-balanced portfolio that can perform across market cycles with no bias towards any specific market cap, investment style or sector, according to the AMC.
Fund objective
The key objective of the WhiteOak Capital flexi cap Fund is to generate long-term wealth for investors by investing across the market capitalisation spectrum. The fund aims to build an active, well-diversified portfolio, representing a cross-section of companies across major industries, economic sectors, and market cap segments.
The exit load of 1 percent on the New Asset Value (NAV) will be applicable only if the units are redeemed within one month from the date of allotment and 'nil' thereafter.
Aashish Somaiyaa, CEO, WhiteOak Capital Mutual Fund said, “WhiteOak Capital MF intends to fill a vacuum of actively managed funds in India. Our company has instituted a performance-first culture, earning the confidence of investors in India as well as overseas."
"India continues to be amongst the most favourable investment destinations in the world, with a high alpha potential embedded on the canvas of a high growth economy. We believe there is a huge scope of differentiation in the industry and will leave no stone unturned to provide best-in-class investment products to retail investors,” he added.
The company is a recent entrant to the Indian mutual fund industry and in November 2021, it acquired the mutual fund business of Yes Bank comprising an overnight fund, a liquid fund and an ultra short term fund.
“We are excited to launch the first product from WhiteOak Capital Mutual Fund’s basket in the form of a Flexicap Fund. We aim to launch a range of funds over the next year and half. We will cover India well beyond the metro cities including B30 locations, to achieve higher inclusivity through omni-channel presence across physical, virtual and digital channels,” said Prateek Pant, Chief Business Officer, WhiteOak Capital Mutual Fund.
Ramesh Mantri, CIO, WhiteOak Capital MF said, “The fund house will consciously seek to maintain a balanced portfolio reflecting the team’s stock selection capabilities rather than being driven by non-stock specific macro factors such as market timing, sector, currency or other such factor exposures."
“WhiteOak’s investment team is amongst the most well-resourced teams with several professionals having considerable experience in managing investment assets, both in India and globally,” Mantri added.
