The new fund offer (NFO) is open till August 4.
The scheme seeks to generate long-term capital appreciation by investing in equities across market capitalisations. It will follow a systematic investment framework rather than relying on discretionary stock selection. According to the scheme document, there is no assurance that the investment objective will be achieved.
Strategy based on multiple investment factors
Unlike traditional funds that may tilt towards a single investing style such as value or growth, the AlphaGrep Flexi Cap Fund aims to diversify across multiple investment factors, including value, quality, momentum, low volatility, size and growth, while dynamically adjusting exposures based on market conditions.
ALSO READ | Individual investors’ share in mutual fund AUM rises to 61% in June: Franklin Templeton
The fund house says the approach is intended to reduce dependence on any one investment style, as factor performance tends to change across market cycles.
The portfolio will typically hold 50-70 stocks and target a risk profile broadly in line with its benchmark, the Nifty 500 Total Return Index (TRI). Portfolio construction will be driven by more than 500 quantitative factors and machine-learning techniques, with limits on single-stock and factor exposures as part of its risk management framework. The strategy may also use option-based and event-driven opportunities within prescribed limits.
Investment framework
The fund’s investment process combines traditional factors with additional signals such as earnings revisions, investor sentiment, ownership trends, market microstructure and event-based indicators. These inputs are processed through a validation framework before being incorporated into stock selection models.
According to the presentation, the strategy is designed to maintain diversification across factor families while increasing or reducing allocations based on changing market conditions, rather than attempting to time individual factors.
Key scheme details
The fund will invest 65-100% of its assets in equity and equity-related instruments, while up to 35% may be allocated to debt and money market instruments. It may also invest up to 35% in gold and silver instruments permitted by SEBI and up to 10% in InvITs.
The benchmark is the Nifty 500 TRI and the fund manager is Ravneet Singh. The minimum investment amount is Rs 500, while the exit load is 1% if units are redeemed within 15 days from allotment.
Back-tested performance disclosed
The presentation includes historical simulated performance of the model portfolio, comparing it with the Nifty 500 TRI and the flexi-cap category across different time periods.
The fund house states these are back-tested results for illustration purposes and not actual scheme performance. It also notes that past performance may or may not be sustained in future and does not guarantee future returns.
As the scheme is a new launch, it does not yet have a live performance track record. Investors will need to evaluate the fund based on its investment process, risk management framework and suitability for their investment objectives rather than simulated returns.
ALSO READ | Bajaj Finserv Small Cap Fund outperforms benchmark in first year: A look at its portfolio strategy