Sundaram Long Term Micro Cap Tax Advantage Fund Series V is a 10-year close-ended Equity Linked Savings Scheme and is beneficial for those who are looking for a fund to save tax. The scheme will also provide capital appreciation for a period of above 10 years. However, one should know that fund will has a moderately high risk as investments will be made in equity and equity-related instruments of companies which can fall under micro-caps too.
New Fund Offer time period
The NFO opened on March 29, 2017, and close on June 29, 2017.
The main objective of the scheme is to generate capital appreciation and provide tax benefit. Micro-cap stock is defined as one whose market cap is equal to or lower than the 301st Stock by market cap (after sorting the securities in the descending order of market capitalization) on the NSE at the time of investment. However, one should know that there is no guarantee or assurance that the investment objective of the scheme will be achieved or not.
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Under normal circumstance, the asset allocation will be followed as mentioned below.
*Equity-related securities will include Cumulative Convertible Preference shares, fully Convertible Debentures and fully Convertible bonds of Companies. It will also include partly Convertible Debentures and bonds including those issued on rights basis subject to the condition that, as far as possible, the non-convertible portion of the debentures so acquired or subscribed will be disinvested within a period of 12 months in accordance with ELSS guidelines.
Liquidity of the Scheme
The scheme will offer redemption or Switch out on every business day at NaV based on that particular prices after the lock-in a period of three years is completed, starting from the date of allotment.
Entry load and Exit load are nil in both the cases. However, one should note that buying and selling of the units on the stock exchange will be based on market price and investors will have to bear the cost of brokerage and applicable taxes on the brokerage and also the other relevant charges as applicable for making transacting on the secondary market.
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Minimum Application Charges
For both types of plans, the minimum investment amount will be Rs 500, which can be increased in multiples of Rs 500 thereafter.
Nifty Small Cap 100 will be the benchmark of the scheme.
It is, however, to be noted that one should consult one’s financial adviser before investing in such a fund. Moreover, one must link one’s investments to one’s financial goals of life.