Sectoral advantage

Money Today-Plexus Management new fund evaluation

 

Scheme type: Open-ended diversified equity

 

Minimum investment: Rs 5,000; unit price: Rs 10

 

Loads: Entry load: 2.25%; Exit load: 1% (within 1 year)

 

Options: Growth and dividend (payout and reinvestment)

 

Investor grievances: Shaji Perincheri; Tel: (044) 39185409; Fax: (044) 39185408

 

E-mail: shaji.perincheri@idfcmf.com

 

 

Objective: To seek long-term capital appreciation by investing in equity and equity-related instruments. The scheme will invest 50% of its assets in a chosen sector and the balance in companies across various market capitalisations and sectors.

 

Benchmark: S&P CNX Nifty Index

Fund manager: Kenneth Andrade

• 65-100% Equity & equity related
• 0-35% Debt & money market instruments
• 0-35% Securitised debt instruments

 

Comparable existing schemes: None

 

 

Idea distiller: A sector fund can be very risky. However, a fund that can choose potential high-growth sectors and can switch sectors, along with a diversified equity base, can deliver high returns.

 

Fund house report: IDFC is the erstwhile Standard Chartered AMC that manages funds worth Rs 12,255 crore across 72 schemes (as on 31 August).

• Returns profile: 4/5
• Risk profile: 5/5

 

Fund manager’s report: Performance of fund manager
• Returns profile: 5/5
• Risk profile: 5/5

 

Scheme DNA: Four fundamentals of the fund scheme
• Unique idea: high
• Return possibility: high
• Risk: High
• Operability/complexity: Medium

 

 

Who should apply: Those who want to invest in a high-risk sector fund, but one that has a lower downside risk. To be on the safe side, put in a small amount.

 

Comments: Even though the sectors for investing are defined, it may not be beneficial for investors. Also, the recalibration time of six months seems too long. This is a high-risk, high-reward fund, where a small mis-step by the fund manager can lead to big losses, and vice versa.