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Business News/ Mutual Funds / NFO Alert: Union Mutual Fund launches Union Business Cycle Fund; all you need to know
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NFO Alert: Union Mutual Fund launches Union Business Cycle Fund; all you need to know

Union Mutual Fund announced the launch of the Union Business Cycle Fund. The scheme opened for public subscription on February 13, 2024, and will close on February 27, 2024.

Union Mutual Fund launches Union Business Cycle Fund as a part of its new fund offers.Premium
Union Mutual Fund launches Union Business Cycle Fund as a part of its new fund offers.

Union Mutual Fund announced the launch of the Union Business Cycle Fund. The scheme opened for public subscription on February 13, 2024, and will close on February 27, 2024. The scheme re-opens for continuous sale and repurchase within five business days of the date of allotment.

What kind of mutual fund scheme is this?

This is an open-ended equity scheme following the business cycles-based investing theme. This product is suitable for investors seeking

  • Capital appreciation over the long term.
  • Investment predominantly in equity & equity related instruments of business cycle-based theme.

What is the main objective of investing in this fund?

The investment objective of the scheme is to generate long-term capital appreciation by investing with a focus on riding business cycles through allocation between sectors and stocks at different stages of business cycles in the economy. However, there is no assurance that the investment objective of the scheme will be achieved.

Harshad Patwardhan, Chief Investment Officer, Union AMC, said, "As professional money managers looking to generate consistent performance, it is crucial to embrace the cyclical nature of markets and treat the long term as a series of shorter terms. Adjusting portfolio positioning by ‘where we are in the cycle’ helps reduce opportunity costs and optimize returns."

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:

InstrumentsIndicative Allocation (% of assets)Risk Profile

Minimum

Maximum

High/Moderate/Low

Equity and Equity related instruments of companies selected based on the business cycle theme

80

100

Very High

Equity and Equity related instruments of companies other than the above companies

0

20

Very High

Debt and Money Market Instruments including units of debt-oriented mutual fund schemes

0

20

Low to Medium

Units issued by REITs & InvITs

0

10

Very High

Are there similar mutual funds in the market?

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

Mutual Fund House

Name of the Fund

HSBC Mutual Fund

HSBC Business Cycle Fund

HDFC Mutual Fund

HDFC Business Cycle Fund

ICICI Prudential Mutual Fund

ICICI Prudential Business Cycle Fund

Axis Mutual Fund

Axis Business Cycles Fund

Kotak Mahindra Mutual Fund

Kotak Business Cycle Fund

TATA Mutual Fund

Tata Business Cycle Fund

Baroda BNP Paribas Mutual Fund

Baroda BNP Paribas Business Cycle Fund

Source: AMFI (As of February 13, 2024)

How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked with the Nifty 500 Index. The performance of the scheme will be benchmarked to the Total Return variant of the Index (TRI).

The Trustee reserves the right to change the benchmark for evaluation of the performance of the scheme from time to time, subject to SEBI Regulations and other prevailing guidelines in this regard including the guidelines issued by SEBI and AMFI for bringing uniformity in benchmarks of mutual fund schemes, and including the requirement to issue an addendum about such change.

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:

- 1% if units are redeemed/switched out on or before completion of 1 year from the date of allotment.

-Nil if redeemed or switched out after completion of 1 year from the date of allotment of units.

Who will manage this scheme?

Sanjay Bembalkar and Hardick Bora are the designated fund managers of this 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.

 

 

 

 

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Published: 13 Feb 2024, 03:03 PM IST
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