Union Mutual Fund has announced the launch of Union Business Cycle Fund. The scheme will open for public subscription on February 13, 2024 and close on February 27, 2024. The scheme will reopen for continued sales and buy-back within five working days from the date of allotment.
What type of mutual fund scheme is this?
It is an open-ended equity scheme aligned with a cyclical investment theme.
- Capital growth over time.
- Primarily cyclical investments in equity and equity-related instruments.
What is your main objective for investing in this fund?
The Plan's investment objective is to generate long-term capital appreciation by making cyclical investments through allocations among sectors and securities at various stages of the economic business cycle, although there can be no assurance that the Plan's investment objective will be achieved.
Harshad Patwardhan, Chief Investment Officer; Union AMC“As a professional asset manager striving for consistent performance, it is important to embrace the cyclical nature of markets and treat the long term as a series of shorter time periods. By adjusting your portfolio positioning depending on 'where we are in the cycle' you can reduce opportunity costs and optimize returns.”
How can one invest in this scheme?
Investors can invest in the scheme with a minimum investment amount.₹1000/- per plan/option, in increments of 1 rupee. There is no upper limit on investment.
Under normal circumstances, the plan's asset allocation would be as follows:
| musical instrument | Index Allocation (% of Assets) | Risk Profile | |
|
minimum |
maximum |
High/Medium/Low | |
|
Equities and equity-related products from companies selected based on cyclical themes |
80 |
100 |
Very expensive |
|
Stocks and stock-related products of companies other than those mentioned above |
0 |
20 |
Very expensive |
|
Debt and money market instruments including units of debt oriented mutual fund schemes |
0 |
20 |
Low to medium |
|
Units issued by REITs and InvITs |
0 |
Ten |
Very expensive |
Are there any similar mutual funds available in the market?
To date, many asset management companies (AMCs) have launched such cyclical funds, allowing interested investors to enjoy returns equivalent to the total return of the securities included in this particular index, which include:
|
Mutual Fund House |
Fund Name |
|
HSBC Mutual Funds |
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 Investment Trust |
Tata Business Cycle Fund |
|
Baroda BNP Paribas Mutual Fund |
Baroda BNP Paribas Business Cycle Fund |
| sauce: AMFI (as of February 13, 2024) | |
How will the scheme benchmark performance?
The performance of the scheme will be assessed against the benchmark Nifty 500 index.The performance of the scheme will be assessed against the benchmark Total Return Edition (TRI) of the index.
The Trustees reserve the right to change the benchmark for assessing the performance of the Scheme from time to time in accordance with SEBI Regulations and other extant guidelines in this regard (including the guidelines issued by SEBI and AMFI to bring about uniformity in benchmarks for mutual fund schemes), including the requirement to issue a supporting document in respect of such changes.
Does the scheme have an entry or exit load?
This scheme has no 'Entry Load', hence investors do not have to pay anything to deposit their profits in this scheme.The 'Exit Load' is also calculated as follows:
– 1% if units are redeemed/converted before completion of one year from the date of allotment.
– None, if the units are redeemed or converted after the expiration of one year from the date of allotment.
Who will manage this plan?
Sanjay Venvalkar and Hardik Vora are the designated fund managers of the scheme.
Does this fund have any inherent risks?
The scheme carries “very high risk” in accordance with the details set out in the scheme information document and is suitable for investors who are willing to understand that their principal will only be at very high risk. However, investors should consult their financial advisor if they are in any doubt as to whether this product is suitable for them.
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Published: February 13, 2024 3:03 PM IST
