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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. 

What is a ‘Special Opportunity’ fund?

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: 

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  • Management change, mergers and acquisition and corporate restructuring
  • Unfavourable macroeconomic or business cycles
  • Product line changes or disruptions
  • Industry-specific events: Disruption due to new entrants and Competition
  • Regulatory changes
  • Global changes

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’.

Investment Strategy

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

Benchmark

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.

Fund Details

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/STP/SWP

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
  1. Any date of the month
  2. Investors may also opt for

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

Fund Managers

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:

  • Aditya Birla Sun Life Equity Fund
  • Aditya Birla Sun Life Manufacturing Equity Fund
  • Aditya Birla Sun Life Midcap Fund

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.

  • Aditya Birla Sun Life India GenNext Fund
  • Aditya Birla Sun Life Resurgent India Fund – Series 3
  • Aditya Birla Sun Life Resurgent India Fund – Series 4
  • Aditya Birla Sun Life Resurgent India Fund – Series 5
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Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.