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Canara Robeco Mutual Fund to launch focused equity fund

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NEW DELHI: Canara Robeco Asset Management Co. Ltd will launch a new fund offer (NFO)–Canara Robeco Focused Equity Fund–an open-ended equity scheme, investing in a maximum of 30 stocks in large-cap, mid-cap, and small-cap companies across diversified sectors. The offer opens on Friday and will close on 7 May, 2021.

Shridatta Bhandwaldar will manage the Canara Robeco Focused Equity Fund.

According to the fund house, the product may suit investors looking for potential capital gains in the medium to long term through investment in a market capitalisation agnostic equity portfolio, comprising well-researched and select high conviction businesses.

“The key differentiator will be sizing investment bets to create larger alpha over the medium term, through focused company selection,” the company said in a release.

The new scheme will take concentrated exposure in not more than 30 high-conviction stocks across market capitalisation and would aim for improved risk-adjusted return characteristics while ystaying diversified.

The fund will identify businesses with sustainable and high growth opportunities, and quality, and scalable earning potential, to be a part of the new scheme portfolio.

The fund would have active portfolio management, with both market capitalization and sector agnostic portfolio construct approach, with optimum weight allocation.

The minimum investment amount in the NFO will be Rs5,000 and multiples of Re1.00 thereafter for lump sum investors and for SIP 1,000 and multiples of Re 1.00 thereafter.

S&P BSE 500 TRI would be the benchmark for the fund.

“I think the global environment of easy liquidity will continue to be supportive. Once the domestic pandemic abates, global flows will come back into our markets. The recovery in the US will also stimulate exports from India, including commodities. However, if lockdowns get more severe and last longer, the rotation from growth to value will stall or even reverse,” said Bhandwaldar, head of equities, Canara Robeco AMC.

“Stronger franchises (what are called quality or growth stocks) will be rewarded over weaker ones. We believe in generating alpha by stock selection rather than picking sector weights. The focused fund will amplify this alpha, although of course, the risk is higher here than a traditional diversified fund.”

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