What is the rationale behind launching a services fund?
We wanted to launch an open- ended equity scheme, which benefits from India’s growth story. Additionally, we did not want the scheme to have high risk – high return profile. The services theme is a broad based theme, which helps spread risk across various sectors. Moreover, the industries under consideration are poised for growth in the coming years.
Which sectors will come under the services umbrella? Could you share which sectors in the list you are particularly bullish about?
The scheme will analyse 15 sub-sectors under the services umbrella: healthcare, fitness, tourism & hospitality, transportation & logistics, staffing, wealth management, insurance, retail credit, media, retail, internet & online services, aviation, legal, architecture and design service.
While our sector preferences will vary with time, at present, we see growth potential in retail credit, business process management, transportation & logistics, financial services and under it insurance industry, wealth management companies and asset management companies.
What will be the market capitalisation bias of the fund?
We plan to invest across market capitalisation. To this end, we have shortlisted 31 large cap, 40 mid cap and 122 small cap companies under services sector. However, in the initial phase we will invest 50% of the portfolio in large cap companies.
In the next one year, what will be the key influencers for equity markets?
Apart from macro-economic and company earnings data, the market participants will track four key events: US mid-term election in November, US growth numbers, Indian election results and government policy whether it is populist or focussed on development.
How much AUM are you planning to raise during the NFO?
We are planning to mop up Rs. 300 to 400 crore during the NFO period.
What is your marketing plan for creating buzz for the fund?
We are extensively using print and digital media for promoting the fund. We are running an advertising campaign across all leading newspapers to create awareness about the fund. Additionally, we are utilising online platforms and social media pages to create a buzz. The fund’s campaign focuses on promoting the fund as having ‘controlled aggression’. The controlled portion refers to the scheme’s market capitalisation, agnostic nature and diversified investment universe across fifteen sectors. Aggression comes from the scheme being a thematic equity fund.
From a personal finance perspective, which category of investor should invest in this fund?
We believe that the fund is suitable for a moderate risk-reward category of investor because it tries to mitigate risk by investing in a wide array of sectors.
What is the ideal holding period for an investor investing in this fund?
We feel this scheme should be a permanent part of investor’s portfolio. The investor can reduce or increase exposure in the scheme based on his financial goals. However, if I have to put a numeric value then the investor should hold the fund for 10 to 15 years to get the maximum benefit from the growth in the services space.
Why should advisors recommend this fund to their clients?
This scheme has the option to invest in a large basket of sectors linked to India growth story. Thus, the scheme’s sectoral bias is based on the fund manager’s outlook for the industry. This makes the scheme an ideal part of an individual’s equity asset allocation as the advisor does not need choose different schemes based on current trends in the market.
