She also revealed that the Fund will be Hedged from Day 1 aiming to protect against Falling Markets thorugh Put Option
One could argue that an existing fund too participates in an IPO is true but its also a fact that the Average Exposure was in a range of 1% to 2% max which is highly unlikely to make any significant impact on the NAV.
With a dedicated IPO fund the exposure will be truly into the IPOs and one gets the opportunity to ride the IPO wave.
D-Mart which gave 294% returns had been invested by 59 funds but with a pathetic average holding of less than 1% exposure by Diversified Equity Fund
Now...with its 294% returns..due to this less than 1% holding, the positive impact on the NAV will be next to nothing.
This Fund will ensure that you truly participate in Quality IPOs
It is not just entering but EXIT that actually determines how much returns you have made.
Data released by Edelweiss that majority of investors tend to exit on Listing Day to lock in gains losing out on the Further Gains when the Stock Price of the IPO company grows. The Difference has been huge. Listing Day gain is 49% whereas the 1 year gain is 82% (Top Quartile)
Fund being Close Ended actually works in favour of the Fund as the Fund Manager is saved from the hassles of investors redeeming (booking profits) and indirectly forcing the Fund Manager to avoid taking a LONG TERM.
Close Ended funds tend to have less churning and hence scope for Lower Expense Ratio which ultimately could result in better returns.
Majority of retail investors fail to get allotments in High Quality IPOs (D-Mart, HDFC Life,etc) due to huge oversubscription and they could avoid this disappointment and participate in growth stories by investing in this fund. IPOs are giving BRILLIANT return, but the investors do not get allotment
Access to Large number of Good Quality IPOs with limited money (as small as Rs.5000). In fact, some investors just to get allotment even go for Margin Funding which increases their cost of acquisition.
A very strong pipeline of IPOs lined up in near future like HDFC Mutual Fund, ICICI Securities, NSE,NSDL, Hindustan Aeronautics, Reliance General Insurance,Bandhan Bank, Prince Pipes and Fittings , Achme Solar Holding Limited etc.
The rationale for my excitement towards this Fund is the space the fund aims to invest in....the IPOs.
The recent reforms, pent-up capital, PSU divestments, the strong participation by FIIs only reinforces my
If you are ready to ride out the volatility and impressed with track record of Edelweiss AMC, then this fund is for you.
The actual fact that everyone misses is that even the BEST performing fund was once a New Fund Offer!!!
I had made all investors with appropriate risk appetite invest in this fund when its name was DAIWA INDUSTRY LEADERS FUND...an unknown name in the Industry.
And Edelweiss has done exceedingly well with all its funds and there is no reason to believe it cannot replicate its success with this fund especially since their Parent are experts in IPOs by way of being Lead Managers
Mutual Funds are subject to Market Risk
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