Sundaram BNP Paribas
PSU Opportunities The PSU Opportunities seeks to gain from a possible re-rating of PSU stocks following the government's stand on divestments. The scheme will invest a minimum of 65 per cent of the corpus in public sector companies and will also look at IPOs of unlisted PSUs. The fund house is betting on the fact that the popular perception of PSUs being inefficient, subject to political interference and limited disclosure to investors will change going ahead. The valuation gaps due to lack of information could change as managements talk about expansion, cost reduction strategies and provide regular quarterly updates. While the investments in this scheme will overlap with the fund's Energy Opportunities and Financial Services funds, the management believes that the scheme is more diversified with exposure to energy, financials and utilities. Since these sectors are some of the fastest growing and at the core of India's growth story, the growth risk according to the fund house is mitigated. However, the investor has a choice in the form of Religare PSU Equity Fund which was launched two months ago. Since returns could depend on positive news flow, invest only if you can stomach short-term volatility and have a longer investment horizon.
Axis Equity Fund
This is the first equity fund from Axis Mutual Fund which is promoted by Axis Bank. While the product is no different than the over 200odd diversified equity funds, the fund house says that the focus would not just be to beat the benchmark (Nifty) in terms of absolute returns but also score higher on the riskadjusted returns parameter. The company seeks to control the risk by looking at quality companies which can deliver sustainable growth and are run by credible managements. The company is focussing on internal research rather than sell-side research and fair value methodology to buy stocks. It would follow a bottom-up approach to choose its basket of 3540 scrips, entirely comprising midcaps and large caps. The bias towards bigger cap companies is to take care of the liquidity and volatility risk.
The fund is run by Chandresh Nigam who has been a fund manager with Prudential ICICI AMC and has 18 years of experience in the equity market. The fund has tied up with 11 banks (in addition to its 930 branches) for distribution and will offer an Easy Call facility where customers can transact through the phone. The conservative strategy of the fund indicates that the company wants to limit its risk and this could mean that it might not take aggressive bets. With very little to separate from other diversified funds a period of performance could be a good starting point before you commit to the fund.
Fidelity India Value Fund
The fund house is positioning its fifth equity diversified fund as a value fund which will predominantly invest in securities that are trading at significant discounts to their 'intrinsic value'. The fund house which has launched an equity fund after a gap of two years will look at valuation parameters such a price to earnings, price to book value, return on capital, PEG ratios and cash flows among other parameters to arrive at a fair value. It will commit investments when it finds large anomalies in the fair value and the market price. The fund house says that its proprietary research, understanding of the business and third party checks give it an information advantage over competition.
