Aditya Birla Sun Life Mutual Fund is launching a new fund offer (NFO) for an equity fund which will follow the ‘special situations theme’. Aditya Birla Sun Life Special Opportunities Fund will open for subscription on October 5 and will close on October 19.
While this is not its technical name, such mutual funds that follow special situation themes act on particular incidents. If the fund manager finds a special situation that may be worthy of generating alpha, he or she will invest in the company. Special situations can arise due to any internal reasons within the company, any macro-economic event in the country or globally. For example, a key management person quit and the shares of the company fell to a great extent. A fund manager of a special situation fund may find this situation as lucrative. They may accumulate shares of such a company to generate better alpha in the future.
Few examples of such special situations:
Generally, companies facing such situations are available at lower valuations which may provide a good margin to the fund managers. This is where the purpose of special opportunity funds comes in. These funds take advantage of such companies who have potential to grow in future but are encountering a ‘special situation’.
The ABSL Special opportunities Fund will aim to generate long term capital appreciation for its investors by investing in opportunities that arise due to special situations. In this example, we used corporate restructuring as a special situation. However, a special situation could be anything: government policy change, regulatory changes, etc.
Here’s what the indicative asset allocation looks like:
| Instruments | Indicative Allocation (% of net assets) | Risk Profile | |
| Minimum | Maximum | High/Medium/Low | |
| Equity & Equity related instruments of special situations
theme |
80 | 100 | High |
| Other Equity & Equity related instruments | 0 | 20 | |
| Debt, Units of Mutual Fund schemes, Money Market
Instruments and Cash & Cash Equivalents |
0 | 20 | Low to Medium |
| Units issued by REITs & InvITs | 0 | 10 | Medium to High |
S&P BSE 500 TRI Index is the benchmark index of the mutual fund scheme. The index consists of the top 500 stocks listed on the BSE.
The mutual fund will have a regular and direct plan. Each of the plans will have growth and dividend options. Within dividend, an investor can opt for dividend payout or dividend reinvestment facilities as well.
Here are other details of the fund:
| Name of the Fund | Aditya Birla Sun Life Special Opportunities Fund |
| Type of Scheme | An open-ended equity scheme which invests in stocks of companies based on different opportunities presented by special situations. |
| Benchmark | S&P BSE 500 TRI Index |
| NFO Dates | Opens on October 5, 2020, and closes on October 19, 2020 |
| Fund Manager | Anil Shah, Chanchal Khandelwal |
| Minimum Application Amount/Minimum Purchase Amount (including switches) | Rs. 500 and in multiples of Re. 1 after that |
| Minimum Additional Investment (including switches) | Rs 500 and in multiples of Re 1 after that |
| Minimum Redemption Amount | In multiples of Re 1 or 0.001 units |
| Entry Load | Nil |
| Exit Load | 0.5% of NAV: If an investor redeems within 90 days from the date of allotment
NIL: If an investor redeems after 90 days from the date of allotment |
| Plans | Regular Plan and Direct Plan |
| Options | Growth and Dividend Option (Payout, Dividend Reinvestment Option) |
|
SIP |
|||
| Min Application Amount | Min Installments | Investment Dates | |
| Weekly | Rs 500 and above | 6 | Monday to Friday of every week |
| Monthly | Rs 500 and above | 6 |
multiple dates (up to 4) within a |
|
STP |
|||
| Min Application Amount | Min Installments | Investment Dates | |
| Daily | Rs 500 and in multiples of Rs 100 thereafter | 20 | The commencement date will be the 15th date from the day the AMC receives the request from the investor. After that, daily STPs can happen on any day. |
| Weekly | If the application amount is more than Rs. 500 but less than Rs. 999
If the application amount is more than Rs. 1000 and above: |
Minimum number of transfers:: 12
Minimum number of transfers: 6 |
1st and 7th and 14th and 21st and 28th of each month |
| Monthly | 1st or 7th or 10th or 14th or 20th or 21st or 28th of each month
Fast Forward Facility: Investors can pick multiple dates (up to 4) within a month In the case, the dates can be 1st and/or 7th and/or 10th and/or 14th and/or 20th and/ or 21st and/ or 28th of each month. |
||
| Quarterly | 1st or 7th or 10th or 14th or 20th or 21st or 28th of each quarter for minimum 4 transfers. | ||
|
SWP |
|||
| Min Application Amount | Min Installments | Investment Dates | |
| Daily | Rs 500 | ||
| Weekly | Rs 500 | Monday to Friday of every week | |
| Monthly | Minimum 6 months | Withdrawal can be of following dates:
Investors can withdraw fixed amount on 1 or 7 or 10 or 14 or 20 or 21 or 28 of each month/quarter |
|
| Quarterly | Minimum 4 quarters | ||
| Half-yearly | |||
| Yearly | |||
Anil Shah
Mr Shah has experience in investments and equity research since the past 29 years. He has worked with RBS Equities and ABN Amro Asia Equities for 15 years.
Other schemes that he manages are:
Chanchal Khandelwal
Mr Khandelwal has an experience of 15 years out of which he has spent 10 years in the financial markets. Prior to ABSL MF, he has worked with Aditya Birla Retail and Aditya Birla Management Corporation Ltd. in the areas of Strategy and Corporate Finance.