The fund house is looking to collect over Rs. 100 crore from this scheme.
Baroda Pioneer Mutual Fund announced the launch of its three year closed end equity fund called Baroda Pioneer Equity Trigger Fund – Series 1. The NFO opens for subscription on December 05 and closes on December 19.
Similar to Union KBC’s Trigger Fund, this fund too will wind up if the NAV of direct plan hits 15 anytime within 3 years. If the fund doesn’t reach its target, the scheme will mature after 3 years at the prevailing NAV.
Speaking at a press conference, Sanjay Chawla, Chief Investment Officer, Baroda Pioneer Mutual Fund struck an optimistic note, “We have launched the scheme at this juncture keeping in mind the improved macro-economic data and expectations of growth. The scheme will predominantly invest its corpus in mid-cap companies. Mid cap stocks tend to outperform large cap stocks in bullish market. Also, we have observed that in the recent past a few mid-cap companies have reported sluggish growth due to higher interest rates. If you go by their EBITDA data, you will find that a major chuck of the profit went towards debt repayment. Since the inflation has eased, we strongly believe that the interest rate will come down which will eventually add to the profit of such companies.”
Chawla told Cafemutual that the fund house is confident that the fund will reach its pre-determined target of 50% within three years. “Upcoming projects like Make in India, swachcha bharat abhiyaan (clean India campaign), clean Ganga project etc. will help many companies in the mid-cap space.”
Kiran Deshpande, Chief Operating Officer, Baroda Pioneer Mutual Fund said that his fund house is targeting to collect over Rs.100 crore from the NFO. Sharing the rationale behind fixing the trigger at 50%, he said, “In the past three years, the Sensex has delivered a CAGR of 14.58%. It means the index has given close to 50% in the less than a three years time. Considering the factors like strong reformation measures of government, GDP growth rate and interest rate cut, we can assume that we would be in a much better position.”
On the fund management strategy, the fund house said that it will follow growth at reasonable price (GARP) strategy in which the fund managers will pick up stocks on the basis of management profile, higher earnings per share growth potential, attractive valuation, etc.
The scheme aims to generate capital appreciation by investing in a portfolio of securities predominantly of mid-cap and small-cap companies. The scheme would be benchmarked against S&P BSE Midcap. Sanjay Chawla and Dipak Acharya are the fund managers of the scheme.
Last year, Union KBC had launched a similar fund called Union KBC Trigger Fund Series I which had delivered its pre-determined target of 30% return in eight months.
