BNP Paribas Mutual Fund has collected close to Rs.240 crore during its NFO. In fact, the fund house has received over 16,000 application, said a senior official from the fund house.
The NFO of this open-end balanced fund closed on March 31, 2017.
The senior official told Cafemutual that most of the inflows had come from IFA channel. “We have received an encouraging response from investors, thanks to our distribution channel such as NDs and IFAs. We have received a large number of application from IFAs, which is a healthy sign for us. Generally, investors who invest through IFAs stay put for long term.”
Talking about what makes this fund different from the existing balanced funds, he says that the fund will follow a conservative approach to reduce risk. He says, “For the past few years, we have seen a few balanced funds delivering aggressive returns just like equity funds. Typically, these funds increase their equity exposure to up to 90%. But balanced funds are meant for investors having low risk appetite. Hence, we will deploy only up to 60% in equity, 10% in arbitrage and the rest in debt instruments.”
Another approach that the fund manager will follow is periodic rebalancing of the portfolio. The fund manager will rebalance the portfolio at the end of every month to ensure the scheme remains true to its label. For instance, if exposure to equity increases from 60% to 66% due to mark to market gain, the fund manager will book profit from equity and deploy it in arbitrage or debt instruments to rebalance the portfolio.
Karthikraj Lakshmanan (Equity) and Mayank Prakash (Fixed Income) will manage this scheme.
