NFO Alert: Edelweiss Mutual Fund launches Edelweiss Business Cycle Fund; all you need to know

Edelweiss Mutual Fund announced the launch of the Edelweiss Business Cycle Fund, an open-ended equity scheme following the business cycles-based investing theme.

The scheme opened for public subscription on July 09, 2024, and will close on July 23, 2024. The scheme re-opens for continuous sale and repurchase on August 06, 2024.

What kind of mutual fund scheme is this?

This is an open-ended equity scheme following the business cycles-based investing theme. This product is suitable for investors seeking

• Capital appreciation over the long term
• Investment predominantly in equity & equity related instruments of business cycle-based theme

What is the main objective of investing in this fund?

The investment objective of the scheme is to generate long-term capital appreciation by investing with a focus on riding business cycles through allocation between sectors and stocks at different stages of business cycles in the economy. However, there is no assurance that the investment objective of the scheme will be achieved.

Speaking about the launch, Radhika Gupta, MD & CEO, Edelweiss Mutual Fund said, “The Edelweiss Business Cycle Fund provides investors with a convenient and unique solution by implementing dynamic sector rotations. This strategy effectively addresses the common challenge of timing sector entries and exits, which investors often struggle with. Momentum has been the best-performing factor in India for many years, and when combined with other fundamental factors, it proves highly effective in generating long-term alpha. Investing across various sectors and market caps, this fund offers a robust solution for core allocation with a long-term focus.”

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of  ₹1000 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Are there similar mutual funds in the market?

To date, many asset management companies (AMCs) have launched such business cycle funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:

How will the scheme benchmark its performance?

The scheme performance would be benchmarked against Nifty 500 TRI. The index tracks the broader Indian equity market. Since the scheme’s portfolio will be market-cap agnostic and will be diversified both in terms of sector and number of stocks, the benchmark would be appropriate to compare the performance of the scheme. The AMC/Trustee reserves the right to change the benchmark for evaluation of the performance of the scheme from time to time, subject to SEBI Regulations and other prevailing guidelines if any.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would also be calculated as under:

• If the units are redeemed /switched out on or before 90 days from the date of allotment – 1% of the applicable NAV.
• If the units are redeemed /switched out after 90 days from the date of allotment – NIL.

Who will manage this scheme?

Bhavesh Jain, Bharat Lahoti, and Amit Vohra are the designated fund managers of this scheme.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.