Aditya Birla Sun Life Mutual Fund Launches Resurgent India Fund – Series 5. The investment objective of the scheme is to provide capital appreciation by investing primarily in equity and equity related securities that are likely to benefit from recovery in the Indian economy.
NFO OPENS: 20th September 2017
NFO CLOSES: 04th October 2017
STRATEGY OF THE FUND:
THREE THEMES FOR INDIA’S ECONOMIC RESURGENCE:
SALIENT FEATURE OF THE THEME:
- GST implementation is imminent & expects to boost Growth. Corporate profitability will increase from reduction in logistic and warehousing costs as well as tax savings.
- Structural & probably a permanent shift of market share across businesses from Unorganized to Organized segment – some key focus sectors will rerate from this trend.
- Push to affordable housing & a huge infrastructure spend by the government will trigger a cascading effect to a lot of focus areas as well as allied sectors.
- These will result in rerating for many companies, it will also prove to be a great investment opportunity for investors in certain sectors that will be major beneficiaries of this transition. Major beneficiaries of the key themes will be sectors like Auto Ancillaries, Building Materials, Housing Finance Companies, Consumer Staples & Durables, Defense and Consumer Discretionary.
This fund seeks to deliver superior returns by investing in a focused portfolio of handpicked companies across sectors that will benefit the most from the above stated theme. The fund will largely follow a bottom up approach and will also seek to bring in top down analysis to identify sectors that could be key beneficiaries of turnaround economy. Besides this, shortterm opportunities would also be seized, that are supported by underlying valuations. As part of the investment strategy, scheme will book profits at opportune moments to take advantage of the volatility in the market. Considering the high equity market valuations, the fund may use long dated Put Options for hedging the portfolio against large market drawdowns.
- Mr. Jayesh Gandhi: C.A, CFA, Master of International management
- Mr.Chanchal Khandelwal: B.Com (H),MBA
WHY THIS FUND:
The present government has been reiterating its growth and development agenda through various initiatives and policy directives. While kick starting Infrastructure investment has been a key priority, fiscal prudence & big reforms have been key focus areas as well. While the 7th Pay Commission Urban & Semi Urban Consumption had a leg up, resurgence in Agriculture (thanks to good monsoons) is going to fuel rural consumption. In the Union Budget 2017, the government announced infrastructure status for affordable housing projects and is termed as a path-breaking Budget as it is a significant move that will provide cheaper sources of finance to developers and also open up additional avenues for developers to raise funds.
With the focus on ͞Housing for All͟ by 2022 the allied sectors like building materials, Housing finance companies, cement etc would scale at an even faster pace. Also, the Government has now allowed higher FDI in defense & approval of Strategic Partnership with Private Sector Participants in collaboration with global armament majors for manufacturing of defense equipments is a huge opportunity for related companies. However, implementation of GST coupled with demonetization is going to be the biggest game changer in addition to the other economic & administrative reforms forming strong tailwinds for the resurgence of high growth in the Indian economy over the next few years. Indian economy will keep growing at a fast rate with the help of the 3 pillars namely, GST and other reforms, favorable macro factors and infra push. Given the past successes in this series and strong investor experience in close ended funds, it makes a lot of investment sense in the theme and the product.
This report is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. Any advice herein is made on a general basis and does not take into account the specific investment objective of the specific person or group of persons. Investors should be aware that the Elite Wealth Advisors Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision. Past performance and any forecast is not necessarily indicative of the future or like performance of the mutual fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
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