Special situations or special opportunities funds invest based on triggers such as corporate restructuring, government policies, regulatory changes or technology-led disruptions. The strategy is agnostic of market mood or valuations, which may make it ideal for current markets.
Weekly Musings – NFO Pick (Bandhan Innovation Fund) indiainfoline.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from indiainfoline.com Daily Mail and Mail on Sunday newspapers.
Suggested InvestmentHorizon: >3 years
Time taken to doublemoney: N.A“It is a roaring one-way bull market, with the indices touching all-time highs. Investors who have missed out and are sitting on cash often tend to come through new fund offers,” said Harshvardhan Roongta, CFP, Roongta Securities.
Some wealth managers believe investors are getting rid of non-performing schemes and reallocating to fresh ideas.
“A significant part of the money that has come into these NFOs is by selling some existing non-performing schemes,” said Gajendra Kothari, Founder, Etica Wealth. He points out that there are several schemes from the top fund houses that failed to beat their benchmark over long periods, and investors are getting rid of these schemes to redeploy that money into NFOs. “Investors tend to be attracted by new ideas,” added Kothari. Finally, many investors still buy the Rs 10 NAV tag and invest in NFOs.
Suggested InvestmentHorizon: >3 years
Time taken to doublemoney: N.AAshish Naik and Hitesh Das will manage the scheme and the fund will be benchmarked against the Nifty 500 TRI. The new fund offer closes on December 18.
“Disruption caused due to Covid-19 itself will present many opportunities in areas like technology, pharma and many other areas,” said Rupesh Bhansali, head (distribution), GEPL Capital. He believes the fund is for investors who understand such themes and first-time investors would be better off in plain vanilla diversified equity funds.
Since the fund is thematic, financial planners feel the portfolio will be concentrated. Given high investor interest in disruptors, the valuations of many such companies will be high. The business could take longer to generate profits leading to volatile price movements in the near term.