Shriram Multi Sector Rotation Fund:Shriram AMC, the asset management company of Shriram Group, has launched its New Fund Offer. This NFO has been launched in the name of Shriram Multi Sector Rotation Fund, which is the first fund of its kind in the industry. The aim of this new scheme of mutual fund is to achieve better returns in the mid to long term by identifying well performing sectors and investing in them. This NFO will be open from 18 November to 2 December 2024. The benchmark for this is Nifty 500 Index.
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What is the investment strategy?
The aim of this new fund is to identify those trading sectors which are performing well. The fund’s strategy is to take advantage of sector rotation to capture opportunities in better performing sectors while reducing exposure to underperforming sectors. The focus of the fund will be to invest in at least 3 to 6 trending sectors depending on the relative momentum of the sectors and exit them if there are signs of weak trend. Sector selection will be based on Shriram AMC’s proprietary EQI framework. Before investing in the identified sector, it will be done on the basis of fundamentals including macro-economic parameters, investment indicators, sentiment, price.
This approach to investment will also help in determining when rotation is needed between different sectors. The decision on sector selection and rotation will depend on the fund manager. For investor awareness, the sectors on which Shriram Multi Sector Rotation Fund will focus at any point of time will be published in the monthly fund fact sheet.
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Safety from getting trapped in ‘sector trap’
Karthik L Jain, MD and CEO, Shriram Asset Management Company Limited, says feedback from advisors indicates that when investors invest in upcoming sectors that are in trend due to macro-economic cycles or policy shifts, they Often get caught in the ‘sector trap’. While their portfolios benefit from uptrends, they generally remain invested even when the trend reverses. Due to this, they may get very low or even negative returns.
Shriram Multi Sector Rotation Fund aims to overcome this problem of investors, so that they can help them avoid sector trap. Our catch line ‘As is the sector trend, so is your portfolio’ is in accordance with this. It is also tax efficient for the investor as there is no capital gains tax impact when the fund manager rebalances across sectors within the scheme.
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High returns in long term
Deepak Ramaraju, senior fund manager, Shriram AMC, says that our two-tier approach, first selecting sectors based on relative trends and then selecting stocks, ensures that the fund remains in line with the label. Sector rotation and stock selection based on our proprietary EQI framework aims to provide high returns over time to our investors.
What are the investment options?
Investors can invest in this fund regularly through Systematic Investment Plan (SIP), Top-up or Systematic Transfer Plan (STP) to meet their financial goals. The minimum investment amount for lump sum or SIP is Rs 500. There is no lock-in period involved. The frequency of SIP can be weekly, 15 days, monthly or quarterly. Once a fund is created, investors can also plan SWP at the same frequency as for regular income. Investors can buy and manage their investments in all Shriram Mutual Funds securely online through the Shrifunds portal at https://shrifunds.shriramamc.in.
NPS: There can be a loss of Rs 50 lakh in retirement fund, pension will also be half, if this option is not taken in NPS
Benefit of LTCG
The fund offers the investor the benefit of Long Term Capital Gains Tax (LTCG) at the rate of 12.5% (plus surcharge and cess) if the investor crosses capital gains of Rs 1.25 lakh in a financial year. If an investor redeems his investment in a sector fund to rebalance his sector allocation, he may face capital gains tax on each transaction. When the fund manager makes transactions within the scheme, there is no capital gains tax on the scheme. These two aspects make this fund a tax efficient investment option for investors who want to invest in trending sectors.
(Disclaimer: The purpose of this article is only to provide information, not to recommend investment in any scheme. Take investment decisions only after taking the advice of your investment advisor.)
