Investors with a good risk appetite often look for opportunities that allow them to take advantage of special situations in the economy and markets. The objective is to invest in companies and themes that tap into changing market dynamics and economic fundamentals.
If you are looking for such a fund, Aditya Birla Sun Life MF has launched Aditya Birla Sun Life Special Opportunities Fund, an open-ended equity scheme following the special situations theme is the one for you.
What are the unique developments?
Events like change in management, business restructuring, merger & acquisitions, government policy changes, regulatory changes, disruption due to a new entrant, macro-economic changes, and geo-political developments create special opportunities of investment.
Examples of some of the special opportunities that have emerged in the recent past include investing in companies that can benefit from the Atma Nirbhar Bharat campaign, massive digital adoption amid the covid-19 pandemic and so on.
Such special situations lead to temporary dislocation in price, creating wonderful investing opportunities. The cherry on the cake is that such special events are a perpetual part of the markets. Therefore, in a way such a special opportunity theme is an evergreen theme and can be a part of high-risk, high-return seeking clients’ investment portfolio across market cycles.
Approach
The fund will seek to have a focused portfolio of 35-40 stocks through a bottom-up approach of stock selection based on the size of opportunity, prospects of future growth and scalability, potential of growth in return on equity, and margin of safety.
The scheme will follow “Price-Target approach” to derive value from tactical opportunities arising due to any special situation and as a result, the fund may have higher turnover. The fund will also be sector and market cap agnostic. It will also invest up to 25% of the corpus in international opportunities pertaining to special situations.
Given the abundant liquidity in equity markets, it seems a good time to look for these opportunities and come into this fund with an investment horizon of 5 years or more.
Key Highlights
- Thematic fund based on special opportunities emerging from situations such as corporate restructuring, management change, geo-political developments, tech disruptions, digital wave, disinvestment drive, change in consumer preference, Covid-led disruptions, Atmanirbhar Bharat and so on
- A focused portfolio of 35-40 stocks
- Portfolio will be sector and market cap agnostic and can also invest in international opportunities pertaining to special situations
- Bottom-up approach of stock selection based on the size of opportunity, margin of safety and potential of growth, scalability, and return on equity
- The fund will be managed by senior fund manager Anil Shah who brings with him nearly three decades of experience in equity research and investments
- The fund management team also includes Chanchal Khandelwal and Vinod Bhat
- NFO has opened on October 5 and will close on October 19
