Samco Mutual Fund, the new kid in the Rs 37 lakh crore MF industry, plan to debut with flexi-cap fund on January 17, internally targeting to mop up Rs 5000 crore given the positive vibes it was receiving from investors and distributors, a top company official said.
The fund will use a metric called “active share” that shifts from traditional benchmarking and focuses on heavily “stress tested” companies. These tests will be conducted along with many parameters, including corporate governance, cash flow and balance sheet, leading to only a small number of companies like 40-50 stocks out of the top 500 companies on Indian bourses.
“The concept of stress testing and innovation is well accepted in the mutual fund industry. We have already engaged 10 per cent of the country’s total distributors and will ramp this to 20 per cent before the fund is launched on January 17. Internally, we are targeting Rs 5000 crore collection in the New Fund Offer,” Samco AMC CEO Umeshkumar Mehta told PTI. He said only 40 companies out of NSE 500 stocks have been able to clear SAMCO’s proprietary HexaShield framework and only businesses that pass the test shall form a part of the investable universe. Mehta said with the huge inflow of capital in the market globally that industry has not witnessed in the last 20 years, markets are bound to rise even there are short terms jerks. Indian stock market had been resilient amid massive continuous selling by the Foreign Institutional Investors.
“The fund is likely to invest in 16 domestic companies and nine international stocks to make this fund unique in terms of exposure and return,” Mehta said. For the first time in India, Samco will transparently disclose daily Active Share to Indian Investors, so that they know when they are paying an active fee, it’s certainly for buying something widely different from the Index.