The open-ended equity scheme, which will predominantly invest in smallcap stocks, aims to deliver long-term capital appreciation by investing in a diversified portfolio of small cap companies in India.
“The fund comes at a time when small-cap equities are offering potentially attractive entry valuations and structural growth opportunities,” a company release said.
Indicative allocation
The fund’s asset allocation pattern will have 65%-100% equity and equity-related instruments of small-cap companies. Apart from this, the fund will have 0%-35% debt securities and 0%-35% money market instruments. The company has provisions to include up to 10% of units issued by InvITs.
The equity and equity-related instruments also include convertible debentures, equity warrants, convertible preference shares, equity derivatives and units of ReITs.
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Investment approach
The fund’s investment approach will emphasise bottom-up research, strong balance sheets, earnings visibility, and what it referred to as prudent position sizing.
Commenting on the launch, Abakkus Asset Manager Private Limited founder Sunil Singhania said, “As a young mutual fund house, we are committed to offering a bouquet of investment products that brings wealth creation opportunities to Indian investors with varied risk appetite. Abakkus Small Cap Fund reflects our commitment to offering solutions that capture structural growth investment opportunities in undiscovered and under-researched areas with a strict risk-reward portfolio management.”The fund will be benchmarked against Nifty SmallCap 250 TRI and will be available in regular and direct plans.
A minimum investment of Rs 500 will be allowed.
The fund manager is Sanjay Doshi, Head of Investments and Research at Abakkus Mutual Fund.
It remains a very high-risk investment avenue with potential key areas of exposure such as Electronics Manufacturing Services (EMS), defence and aerospace value chain companies, applied material science or outsourced semiconductor assembly and test, and travel, leisure and hospitality.
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