NFO Alert: Baroda BNP Paribas Mutual Fund launches Baroda BNP Paribas Manufacturing Fund; all you need to know

Baroda BNP Paribas Mutual Fund announced the launch of the Baroda BNP Paribas Manufacturing Fund, an open-ended equity scheme following a manufacturing theme.

The scheme opened for public subscription on June 10, 2024, and will close on June 24, 2024. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.

What kind of mutual fund scheme is this?

This is an open-ended sectoral/thematic equity scheme following a manufacturing theme.

Commenting on the NFO launch, Suresh Soni, CEO, Baroda BNP Paribas Mutual Fund, said, “We are thrilled to launch the Baroda BNP Paribas Manufacturing Fund. The scheme offers a compelling investment opportunity as the manufacturing sector is poised for multi-decade growth fuelled by growing consumption, investments, exports, changing geopolitical dynamics, and favourable government policy.”

Also Read: Mutual Funds: Should you invest in NFO? Here is a framework that will help you decide

What is the main objective of investing in this fund?

The scheme shall seek to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies engaged in the manufacturing theme.

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of ₹1000 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Are there similar mutual funds in the market?

To date, many asset management companies (AMCs) have launched such manufacturing mutual funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:

How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked to the performance of Nifty India Manufacturing TRI.

Nifty India Manufacturing TRI refers to the Nifty India Manufacturing Total Returns Index, which monitors the progress of stocks reflecting India's manufacturing sectors, incorporating reinvested dividends for a comprehensive evaluation of performance.

The Nifty India Manufacturing TRI shares similarities with the Nifty India Manufacturing Index, yet it additionally considers dividends disbursed by the constituent companies. Consequently, the TRI typically yields higher returns compared to the standard index.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would also be calculated as under:

• If units of the scheme are redeemed or switched out up to 10% of the units within 1 year from the date of allotment - Nil.
• If units of the scheme are redeemed or switched out over and above the limit within 1 year from the date of allotment - 1% of the applicable NAV.
• If units of the scheme are redeemed or switched out after 1 year from the date of allotment - Nil.

Who will manage this scheme?

Jitendra Sriram shall be the designated fund manager for the scheme.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.