The Bank of India Multi-Cap Fund is an open-ended equity scheme investing across large-cap, mid-cap, and small-cap stocks, thus minimising volatility due to diversified allocation.
Bank of India AMC on Friday launched a new fund offer (NFO) for the Bank of India Multi-Cap Fund, which will invest at least 25 per cent of its assets in large, mid, and small-cap stocks. The NFO opens Friday and closes on February 24, 2023.
The fund house said the “scheme aims to leverage on structural and cyclical opportunities” to generate long-term capital appreciation.
The fund will invest in equity and equity-related securities across market capitalisations and is suitable for investors looking for a “single product solution” for equity investment. Fund manager Nitin Gosar will manage the scheme.
It is the first NFO of the bank in two years.
Mohit Bhatia, CEO of Bank of India Investment Managers Private Ltd., said given the markets’ structural long-term strengths and volatility inherent in growth markets like India, a scheme that invests across categories may provide a good opportunity for long-term wealth creation.
Commenting on market volatility, Alok Singh, chief information officer of the company, said diversification helps manage volatility. Hence, a multi-cap fund is suitable because, by regulatory mandate, it invests a minimum of 25 per cent across each of large, mid, and small-cap firms.
In addition, he said, large-cap compounders are likely to provide index-oriented returns, while mid- and small-cap exposures will likely provide Alpha creation opportunities in the portfolio.
The scheme, hence, will manage 25 per cent of the portfolio in a dynamic rules-based approach to allocating across market capitalisation based on medium-term trends and valuation metrics.
Singh said the Bank of India Multi-Cap Fund is suited for investors looking at exposure to growth-oriented equity funds with a minimum three-five-year investment horizon.
The scheme’s minimum initial subscription amount is Rs 5000, and Rs 1 thereafter. The scheme would be benchmarked against S&P BSE 500 TRI (first tier).
Key Features
• It will invest a minimum of 25 per cent in each of the large, mid, and small-cap segments.
• The scheme seeks to leverage structural and cyclical opportunities.
• The fund will explore the best of three large, mid, and small-cap companies.
• Ability to navigate different market cycles and conditions.
• It will follow a blend of a top-down and bottom-up approach for portfolio creation.
• The scheme offers relatively better risk-adjusted returns than single-cap-biased funds.