NFO Alert: Bandhan Mutual Fund launches Bandhan Innovation Fund; all you need to know

Bandhan Mutual Fund announced the launch of the Bandhan Innovation Fund, an open-ended equity scheme following a sectoral or thematic theme.

The scheme opened for public subscription on April 10, 2024, and will close on April 24, 2024. The scheme will re-open for ongoing subscription and redemption within five business days from the date of allotment of units.

What kind of mutual fund scheme is this?

This is an open-ended equity scheme following the innovation theme. Vishal Kapoor, CEO, Bandhan AMC, while discussing the new offering, said, “Innovation has consistently driven companies forward, and today, India’s flourishing innovation landscape presents an exciting investment opportunity. We are observing ground-breaking transformations not only in technology but also in sectors like finance, auto, technology, healthcare, entertainment, retail, etc. With India’s climb in the global innovation rankings and swift advancements in fields like digital media, e-commerce, and electric vehicles, we stand at a crucial juncture. The Bandhan Innovation Fund is crafted to capitalize on these pivotal shifts, inviting mutual fund investors to join in this wave of innovation-driven growth.”

What is the main objective of investing in this fund?

The scheme seeks to generate long-term capital appreciation by investing predominantly in equity and equity-related instruments of companies following the innovation theme. The fund targets companies with substantial R&D investment, high skilled-employee costs, potentially higher margins or growth, unique products or services, non-linear business models, and a notable brand presence.

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 net assets) of the scheme’s portfolio will be as follows:

Are there similar mutual funds in the market?

To date, two asset management companies (AMCs) have launched such funds in the past. The following table illustrates the names of the mutual fund houses along with their respective innovation funds.

How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked against NIFTY 500 TRI as the scheme will seek to invest in equity and equity-related securities of companies which endeavour to be innovators across sectors and market capitalization. Therefore, a broad market index is selected which accounts for a large section of the Indian market capitalization and covers major sectors. Additionally, Nifty 500 TRI forms part of the Tier I benchmark of the AMFI-approved list for the thematic fund (Innovation Theme).

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 be calculated as under:

• If redeemed/switched out within 30 days from the date of allotment: 0.50% of the applicable NAV.
• If redeemed/switched out after 30 days from the date of allotment – Nil

Who will manage this scheme?

Manish Gunwani (equity portion), Brijesh Shah (debt portion), and Ritika Behera (overseas portion) 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.