Canara Robeco Mutual Fund to launch Focused Equity Fund NFO from April 23, 2021 to May 7, 2021
- New Scheme offers a high conviction portfolio strategy of not more than 30 stocks for longer term wealth creation
- Key differentiator will be sizing investment bets to create larger alpha over medium term, through focused company selection
- Philosophy of company selection and efficient risk management are the key criteria for portfolio construction
The new scheme, Canara Robeco Focused Equity Fund, has the objective of taking concentrated exposure in not more than 30 high conviction stocks across market capitalization, and would aim for improved risk-adjusted return characteristics while yet staying diversified. The Fund Manager adopting this approach, would identify businesses with sustainable and high growth opportunity, and quality, and scalable earning potential, to be a part of the new scheme portfolio.
Speaking on the rationale for launching Canara Robeco Focused Equity Fund (CRFEF), Mr. Mohit Bhatia, Head - Sales & Marketing, said: “We are happy to introduce our newest product in the category of Focused Equity Portfolio. CRFEF is an open -ended equity scheme that takes concentrated exposure in not more than 30 high conviction stocks across market capitalization, depending on growth opportunities. The Fund tends to benefit from active allocation to select best ideas with the aim to achieve optimal portfolio diversification across sectors to manage risk. This product may be well suited for Investors looking for potential capital gains over medium to long term through investment in a market capitalization agnostic equity portfolio, comprising of well researched & select high conviction businesses, as identified by our Investment team.
Mr. Nimesh Chandan, Head, Investment, Equities, said: “Canara Robeco Focused Equity Fund will have a portfolio of select high conviction ideas across sectors and market capitalisation that are expected to generate healthy returns for the investors over medium to long term. Over the years, our funds have generated good returns for our investors mainly through selection of good quality, growth-oriented businesses. For the focus fund, we endeavour to identify such companies where we can make a significant allocation and thereby reap the benefits of the right selection.”
Mr. Shridatta Bhandwaldar, Head – Equities and Fund Manager to this scheme, said: “The investment approach to our Focussed Equity Fund would be three-pronged, one would be to identify leaders who have highest market share and industry-leading ROE/ROCE profile, second would be, to be able to identify challengers who have the possibility of superior earnings growth v/s Leaders due to market share gains and acceptable average ROE/ROCE of more than 15 per cent, and third, identifying new themes, stocks and sectors which are witnessing cyclical tailwinds. Benefits of this approach of portfolio creation, would help achieve compounding over medium term, steadiness to portfolio, high downside protection and low volatility. Emerging themes and Cyclical tailwind beneficiaries will benefit alpha generation due to meaningful earnings deviations.”
“Managing Risk becomes critical for creation of a concentrated portfolio and the fund would focus on the risk control process through various tools such as stock limit and sector limit,” Mr. Bhandwaldar added.
Canara Robeco Focused Equity Fund would have an active portfolio management, with both market cap and sector agnostic portfolio construct approach, with optimum weight allocation.
The minimum investment amount in the NFO will be Rs 5,000 and multiples of `1.00 thereafter for Lumpsum investors and for SIP Rs. 1,000.00 and multiple of Re. 1.00 thereafter.
S&P BSE 500 TRI would be the benchmark for Canara Robeco Focused Equity Fund.
Mr. Shridatta Bhandwaldar would be managing Canara Robeco Focused Equity Fund. At Canara Robeco AMC, Mr. Bhandwaldar forms an integral part of Equity Fund Management team and he believes in holding selective quality stocks in the portfolio to create wealth through compounding over the medium term. He is currently directly managing Canara Robeco Bluechip Equity Fund, Canara Robeco Flexicap Fund, and Canara Robeco Equity Hybrid Fund.
Canara Robeco Focused Equity Fund NFO opens on April 23, 2021 and closes on May 7, 2021. The new scheme re-opens on Tuesday, May 18, 2021.