Series 2 opens for subscription on January 13 and closes on January 24.
After collecting Rs. 260 crore in its Equity Opportunities Fund Series 1, IDFC is set to launch two more series of this fund. The Series 2, a three year close end fund, opens for subscription on January 13 and closes on January 24. The Series 3 is expected to be launched next month.
The Series 2 and 3 funds will build diversified portfolios spread across all sectors and market capitalizations and will be benchmarked against S&P 500.
The minimum one can invest is Rs. 5000. The fund will only have dividend payout and dividend sweep option. Under the dividend sweep option, investors can transfer the dividend paid by the scheme to any other schemes of IDFC MF.
It is likely that both the series will have some similarities in their portfolios. Both Series 2 and Series 3 will follow the same investment strategy but the primary filter of shortlisting stocks in case of Series 3 will be picking up stocks which are likely to pay high dividends. The Series 3 fund will invest in stocks which reward investors by paying dividends on the premise that such strategy has paid off in consolidating market and not so much in when the market is in expansionary mode. “There is an opportunity to build a concentrated portfolio on the theme by way of two distinct products. The primary filter for Series 2 is better capacity utilization led by pricing power and the second fund will have similar filters but the primary filter is companies which have paid high dividend payout,” said Punam Sharma, Director of Equity Research, IDFC AMC.
On maturity,investors have an option to switch their investments in any of the open end schemes of IDFC MF.
The fund will be managed by Punam Sharma. Punam currently manages IDFC Nifty Fund, IDFC Monthly Income Plan, IDFC Asset Allocation Fund and IDFC Savings Scheme.
Series 3 of this fund will be a 21-month close end fund. IDFC has kept the tenor of this fund shorter in order to capture the dividend paying cycle of companies. “The intent of not having a growth option is in all our series is that we have launched these funds with a finite time horizon and if the story plays out earlier we’ll pay back the appreciation to investors through dividends,” said Kalpen Parekh, CEO, IDFC MF.
There have been a flurry of close end equity fund NFOs in the recent past. So far, eight close end equity funds have been launched by Reliance, ICICI Prudential, Sundaram, Axis and Pramerica which have collected in excess of Rs. 1500 crore.
