March 2019

NFOs of various hues adorn the March 2019 NFONEST.

After the default of IL&FS hit liquid schemes, mutual fund houses are turning towards overnight funds that prove to be less risky. Over the last six months, since the IL&FS crisis surfaced, 16 fund houses have sought the Securities and Exchange Board of India’s approval to launch overnight funds. These fund houses include — Yes Mutual Fund, Edelweiss Mutual Fund, HSBC Mutual Fund, Tata Mutual Fund, DHFL Mutual Fund, Mahindra Mutual Fund, BNP Paribas Mutual Fund, Axis Mutual Fund, ICICI Prudential Mutual Fund, DSP Mutual Fund, Reliance Mutual Fund, and IDFC Mutual Fund, among others. ICICI Prudential Mutual Fund and Aditya Birla Sun Life Mutual Fund have already launched their overnight funds. Overnight funds invest their assets in CBLO (collateralised borrowing and lending obligations) and repo/reverse repo instruments that mature in one day, while liquid funds invest in treasury bills, commercial paper and certificate of deposit that have a maturity up to 91 days. Overnight funds expose investors neither to credit risk nor duration risk but yield paltry returns of about 6.4%. Liquid funds do slightly better.

Sundaram Overnight Fund

Opens: March 15, 2019

Closes: March 20, 2019

Sundaram Overnight Fund is an open-ended debt scheme which proposes to invest in the overnight securities, the securities having maturity period of one business day. The objective of this scheme is to generate an income by investing in debt, money market instruments, cash and cash related instruments having overnight maturity. As a benchmark, this fund will follow the Nifty 1D Rate Index. It has a low risk associated with it. The scheme may invest in repo/reverse repo transactions in corporate debt securities. It may also invest in liquid schemes of mutual funds. Sundaram Overnight Fund will be jointly managed by Mr. Siddharth Chaudhary and Mr. Sandeep Agarwal.

SBI Capital Protection Oriented Fund – Series A (Plan 2)

Opens: March 11, 2019

Closes: March 25, 2019

SBI Mutual Fund has launched a new closed ended growth scheme named SBI Capital Protection Oriented Fund - Series A (Plan 2) with maturity period of 1265 days from the launch date. The scheme endeavors to protect the capital by investing in high quality fixed income securities that are maturing on or before the maturity of the scheme as the primary objective and generate capital appreciation by investing in equity and equity related instruments as a secondary objective. Mr. Rajeev Radhakrishnan shall manage the debt portion and Mr. Ruchit Mehta the equity portion. The performance of the scheme will be benchmarked against CRISIL Hybrid 85+15 - Conservative Index.

HSBC Large and Midcap Equity Fund

Opens: March 11, 2019

Closes: March 25, 2019

HSBC Large & Mid Cap Equity Fund is an open-ended scheme which will invest in both large and mid-cap stocks. It seeks to generate long-term growth of the invested capital.  HSBC Large and Mid-Cap Equity Fund proposes to allocate the assets into equity and equity-related securities where it will invest a minimum of 80% to a maximum of 100% of the total assets. It further proposes to invest a minimum of 35% to a maximum of 65% of the total assets in the stocks of large and mid-cap companies, where a medium to high risk is associated. It will invest in the range of 0-30% in the stocks of other than large and mid-cap companies. It proposes to invest from 0 to 20% of the total assets in debt and money market instruments also which will include the cash and cash equivalents. A low to medium risk is associated with this approach. The scheme will follow the Nifty Large & Mid-Cap 250 TRI as benchmark index. Mr Neelotpal Sahai will be the fund manager.

ICICI Prudential Quant Fund, Mirae Asset Focused Fund, Sundaram Ultra Short-term Fund, Edelweiss Overnight Fund, Yes Overnight Fund, Shriram Balanced Advantage Fund, Shriram Large Cap Fund and CPSE ETF FFO 4 are expected to be launched in the coming months.