- The fund is not bound by any market capitalisation or theme or sector for choosing stocks.
- Portfolio of the Fund will be restricted to about 25 – 30 stocks.
- The Fund will NOT be a small Cap fund but will be a Flexible Fund
- The Fund will be run like a Alpha Fund. The Fund Manager will “refresh” the portfolio but not “churn” like a Diversified Fund.
- Since the Fund is locked in, Fund Manager is saved by the hassle of investors redeeming his units and indirectly forcing the Fund Manager to avoid taking a very long term on any stock. Hence, here, the FM can ensure better returns by holding on to stocks for a longer period.
- Close ended funds have less churning and hence scope for lower expense ratios too ultimately resulting in better returns.
- The Fund is managed by Mr.Shailesh Raj Bhan who has been very consistent in the funds he is managing namely Reliance Equity Opportunities fund, Reliance Top 200 fund, Reliance Pharma Fund,etc.
- Close ended funds can be invested only via Lumpsum and thus investors are deprived the benefit of Systematic Investment Plans. Lumpsum carry the risk of Timing the investments.
- Another disadvantage with Close ended funds is that even the Fund Manager will NOT get fresh inflows due to absence of SIPs and hence will be helpless to invest further in case of Quality stocks being available at cheap prices due to market correction or otherwise.
- Studies have proved that just because a Fund is close ended does not mean it will fare better than Open ended funds.
The Fund Manager, Mr.Shailesh Raj Bhan’s handling of other funds do inspire confidence, but the fact that the fund is CLOSE ENDED is the single biggest negative of the fund and negates most of the positives.
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