Old Bridge Mutual Fund on Wednesday, January 17, opened its inaugural fund. The new fund offer (NFO) named as ‘Focused Equity Fund’ is an open-ended scheme. It is designed to generate long-term capital appreciation by investing in equity and equity-related instruments Old Bridge Mutual Fund said.
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This approach involves up to 30 companies across various market capitalisations, including mid-cap, small-cap, and large-cap segments. It is important to note that while the scheme has outlined its objectives, there is no assurance or guarantee of realising these goals, the fund house said.
The face value of the units in this scheme is set at ₹10 per unit.
Load structure
There is no entry load for investors. However, an exit load is applicable, with a rate of 1% if redeemed or switched out within 365 days from the date of allotment.
This exit load is waived for redemptions or switches made after 365 days from the date of allotment, including transactions under the Systematic Withdrawal Plan (SWP) and Systematic Transfer Plan (STP).
Notably, no exit load applies to switches made between different options of the scheme.
Minimum investment
Systematic Investment Plan (SIP) participants are required to invest a minimum of ₹2,500 and in multiples of ₹1 thereafter. The minimum number of instalments is six.
Plans and options
Old Bridge Mutual Fund’s scheme comprises two plans: Regular Plan and Direct Plan, each with common portfolios but separate Net Asset Values (NAVs).
The regular plan is for investors who route their investments through distributors, while the direct plan is for those who prefer a direct investment approach.
Both plans offer growth and Income Distribution cum Capital Withdrawal (IDCW) options.
Asset allocation
Under normal circumstances, the fund’s asset allocation pattern is defined as follows:
(Note: Subject to an overall limit of 30 stocks.)
Risk factors
The scheme outlines standard risk factors associated with mutual fund investments, such as trading volumes, settlement risk, liquidity risk, and the possible loss of principal.
Scheme-specific risk factors include concentration risk and risks associated with investing in equities.
Fees and expenses
The New Fund Offer (NFO) expenses, covering various activities related to the NFO, will be borne by the Asset Management Company (AMC).
The estimated annual scheme recurring expenses, including investment management and advisory fees, trustee fees, audit fees, and others, maybe up to 2.25% of the daily net assets.
A look at returns of peer funds
| Fund Name | Return (%) – 1 Year |
|---|---|
| SBI Focused Equity Fund | 25.91% |
| Parag Parikh Flexi Cap Fund – Regular Plan | 37.91% |
| HDFC Flexi Cap Fund | 33.57% |
| Franklin India Flexi Cap Fund | 35.46% |
| Franklin India Focused Equity Fund | 26.58% |
(Source: Value Research)
Investment considerations
For investors seeking long-term capital appreciation through a diversified equity portfolio, Old Bridge Mutual Fund’s maiden scheme may present a decent option.
Andrade said, “The environment has been fairly robust. Opportunities present themselves at various points in the market cycle.”
This optimistic perspective may instil confidence in investors, suggesting a favourable market backdrop for the fund’s launch.
Discussing portfolio management, Andrade stressed the importance of focus, stating, “That’s where our attention lies—keeping it reasonably small, creating an easily trackable portfolio. A portfolio of 25 or 30 companies won’t be overly diversified.”
