IDFC Mutual Fund today announced the launch of its three year close-ended diversified IDFC Equity Opportunities Series 1 Fund.
The fund is aiming for a corpus of around Rs 150 crore during the NFO period and has the leeway to extend the NFO in case if it falls short of this target amount. The NFO opens for subscription on 9 April and closes on 10 April.
The fund’s portfolio will consist of around 60 to 70 stocks outside the top 200 companies. Kenneth Andrade, Head - Investments, IDFC Mutual Fund said that the fund will invest in ancillary based companies and will avoid exposure to energy and financial services firms. The fund will invest in companies which are available at discounted valuations with good cash flows having a long track record.
“PAT margins and ROEs of corporate India are at a decade low with small caps ratios being significantly lower. If there is a reversal in the Indian economy, smaller companies bounce back faster to generate higher ROEs and this impacts their valuations. The investment strategy of this fund is designed to benefit from the opportunity,” stated a company press release.
The fund’s portfolio will have around 20% stocks which overlap some of IDFC’s existing funds like IDFC Infrastructure Fund, IDFC Premier Equity and IDFC Sterling Equity Fund.
The fund’s minimum subscription amount is Rs 5000 and will be benchmarked against BSE 500 Index. IDFC will launch next Series II version of this fund whenever it spots an investment opportunity.
The fund is targeted towards informed investors and HNIs and will be marketed through bankers and wealth management firms.
