Axis Mutual Fund is launching a new fund offer (NFO) for an equity fund which will invest in stocks following the ‘special situations theme’. Axis Special Situations Fund NFO opens on December 4 and will close on December 18.
What is a ‘Special Situations’ fund?
Special Situations Funds are mutual funds where the fund manager acts on specific incidents. If the fund manager finds a special situation that may be worthy of generating alpha(returns), he or she will invest in that company.
Special opportunities or situations can either be a global event, a national event, any macro or microeconomic issues, and it also could an internal situation within the company.
For example, say a high-level executive has decided to leave the company, and the share price of the company falls to a great extent. A special situation fund’s fund manager may find want to take advantage of this situation and invest in this company. The fund manager may take such a decision knowing that the company fundamentals are strong enough to generate alpha in future.
More instances of special situations are:
The scheme will aim to generate long-term capital appreciation by investing in stocks depending on special situations. We discussed a few examples of possible special situations above.
Indicative Asset Allocation of The Fund
| 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 | High |
| Debt and Money Market Instruments | 0 | 20 | Low to Medium |
| Units issued by REITs & InvITs | 0 | 10 | Medium to High |
The scheme will benchmark its performance against the Nifty 500 TRI index. The index represents the top 500 companies.
The mutual fund has direct and regular plans. Investors can opt for growth or dividend options. Under the dividend option, you can choose for dividend payout and dividend reinvestment facility.
Other details of the fund are as follows:
| Name of the Fund | Axis Special Situations Fund |
| Type of Scheme | An open-ended equity scheme investing in companies based on special situations. |
| Benchmark | Nifty 500 TRI Index |
| NFO Dates | Opens on December 4, 2020, and closes on December 18, 2020 |
| Fund Manager | Ashish Naik, Hitesh Das |
| Minimum Application Amount/Minimum Purchase Amount (including switches) | Rs. 5,000 and in multiples of Re. 1 after that |
| Minimum Additional Investment (including switches) | Rs 100 and in multiples of Re 1 after that |
| Minimum Redemption Amount | Nil |
| Entry Load | Nil |
| Exit Load | Redemption before 12 months:
Nil: For 10% of the investment 1%: For the remaining investment Redemption after 12 months: Nil |
| Plans | Regular Plan and Direct Plan |
| Options | Growth and Dividend Option (Payout, Dividend Reinvestment Option) |
| Frequency | Minimum Installment | Minimum Amount |
| Monthly | 6 | Rs 1,000 and in multiples of Re 1 |
| Yearly | 3 | Rs 12,000 and in multiples of Re 1 |
Ashish Naik: Mr Naik will be managing the equity portion of the fund. He has a 10-year work experience. In his last stint, he worked as an equity analyst with Axis AMC itself.
Hitesh Das: Mr Das is the designated fund manager for overseas securities. He has worked as a risk analyst and an equity research analyst with various organisations.
Happy Investing!