IDBI Mutual Fund house opens subscription for the NFO IDBI Banking and Financial Services Fund on 14th May, 2018 and closes on 28th May, 2018.

Key Details of IDBI Banking and Financial Services NFO 

NFO Period 14th May to 28th May, 2018
Fund Manager Uma Venkatraman
Fund Type Open-Ended
Minimum Investment Rs. 5000
Benchmark Nifty Financial Services -Total Return Index

The Options for Investment in This Fund are

  • IDBI Banking and Financial Services Fund (Growth)
  • IDBI Banking and Financial Services Fund (Dividend Payout)

IDBI Banking and Financial Services Fund has opened for subscription from 14th May, 2018. It will concentrate on Banking and Financial Services Sector in India.

Invest in IDBI Banking and Financial Services Fund

If you want to invest in this NFO, the following steps will have to be followed :-

  1. Log in to your Groww account, if you are a new user,  sign up first– it is operated online and takes 2-3 working days.
  2. Decide the amount you would like to invest in IDBI Banking and Financial Services Fund.
  3. Email Groww support on with a request or call/Whatsapp on 9108800604.

Investment Objective of IDBI Banking and Financial Services Fund

The objective of the fund is to give investors high growth opportunities and to gain long-term capital appreciation by mainly investing in equity instruments of companies involved in Banking and Financial Services Sector.
However, there can be no guarantee that the investment goal under the fund will be achieved.

Other Banking and Financial Sector Funds to Explore

There are 2 other good banking and financial sector funds that you should have a look at:

ICICI Prudential Banking and Financial Services Fund

This fund has a given a return of over 22% per annum since its launch in 2013.

Aditya Birla Sun Life Banking and Financial Services Fund

This fund too was launched in 2013 in the month of September. Over the last 3 years, it has managed to give more than 20% per annum.

Investment Strategy of IDBI Banking and Financial Services Fund

IDBI Mutual Fund has launched Banking and Financial Services Fund, a scheme which is focused on BFSI sector. According to the regulator, the fund will be needed to invest 80 % to 100 % of its assets in the banking and financial services sector.

It can invest the balance 0 to 20 % in the scrips of other types of companies or in debt funds.

The fund manager will practice an active management style to make returns. The fund would invest in Banks as well as in non-banking financial service companies, insurance companies, rating agencies, housing finance, broking companies, microfinance companies, wealth management companies, stock/commodities exchange etc.

The scheme may also invest in IPOs of companies which could be classified under financial services sector. The scheme will not invest in ADRs/GDRs and foreign securities.

The scheme may also enter into repurchase (repo) agreement and reverse repurchase agreement in government securities, held by the guidelines and regulations applicable to such transactions. It will not invest in repo in corporate debt securities.

The scheme does not write options or purchase instruments with embedded written options. The total exposure related to option premium paid will not exceed 20% of the net assets of the scheme.

Pending deployment of funds as per the investment objectives of the scheme, the funds may be parked in short-term deposits of the scheduled commercial banks, subject to guidelines and limits stated by SEBI from time to time.

The fund may get involved in short selling of scrips, as per the framework relating to short selling and securities, the involve lending and borrowing specified by the regulator.

The fund shall not deploy more than 20 % of its investments in scrips lending and not more than 5 % in scrips lending to any other single counterparty. The scheme may also participate in securities lending, to augment its income.

Instrument Minimum Allocation Maximum Allocation Risk Profile
Equity & Equity related instruments of companies engaged in Banking & Financial Services Sector 80 % 100 % High
Equity and Equity related instruments of other than Banking & Financial Services Sector Companies 0 % 20 % High
Debt and Money Market instruments 0 % 20 % Low to Medium
Units issued by Real Estate Investment Trusts (REITs) & Infrastructure Investment Trusts (InvITs) 0 % 10 % Medium to High

Benchmark of IDBI Banking and Financial Services Fund

NIFTY Financial Services – Total Return Index (TRI) has a portfolio of companies under financial services which includes banks, non-banking financial companies (NBFC), housing finance, microfinance, stockbroking & allied services, wealth management, asset reconstruction companies, rating agencies, asset management companies, depositories, pension companies, insurance companies, real estate investment trust (REITs), stock/commodities exchange and other market intermediaries, payment intermediaries, statutory corporations, companies and other bodies in which the government has financial or authoritative interest.

The companies in the portfolio of this benchmark include Bajaj Finance, Kotak Bank, HDFC Bank, Bajaj Holdings, ICICI Prudential Life Insurance Corporation Ltd, Axis Bank, REC etc.

Fund Manager of IDBI Banking and Financial Services Fund

Uma Venkatraman has been designated as Vice President and equity fund manager of IDBI Mutual Fund House. She has been associated with IDBI since 2010. She has done her MSF in Finance from Boston College, Carroll School of Management.

The funds managed by her are IDBI India Top 100 Equity Fund, IDBI Nifty Index Fund, IDBI Nifty Junior Index Fund, IDBI Small Cap Fund, IDBI Gold Fund, IDBI Monthly Income Plan etc.

IDBI Banking and Financial Services Fund Suitable For

This fund is suitable for investors who are seeking long-term capital growth by investing predominantly in equity and equity related instruments of companies engaged in banking & financial service sectors.

Since this fund is an open-ended fund, the investors can enjoy the benefit of withdrawing their investments from this fund whenever they feel like.

Though, they have to pay is the exit load, if withdrawn within a time frame. Unlike close-ended funds, the amount here is not blocked for a certain time duration. So this fund basically ensures liquidity.

IDBI Asset Management Company

IDBI Bank sponsors IDBI Asset Management Limited, the asset management company of IDBI Mutual Fund. As one of India’s largest banks, IDBI Bank has played an important role in India’s industrial & economic development for over 40 years.

First, as a development financial institution & then, as a full-time Commercial Bank.

Mutual Fund IDBI Mutual Fund
Setup Date Mar-29-2010
Incorporation Date Jan-25-2010
Sponsor IDBI Bank Ltd
Trustee IDBI MF Trustee Company Ltd.
Chairman N.A
CEO / MD Mr. Dilip Kumar Mandal
Compliance Officer Chandra Bhushan
Investor Service Officer Durgaprasad S. V.
Assets Managed Rs. 10759.73 crore (Mar-31-2018)


Sectoral funds are usually suitable for investors who can take exposure to a focused scheme portfolio.
Private banks are also unprotected to the non-performing assets crisis faced by public sector banks as well as corporate governance issues. It is also not sure if IDBI Mutual Fund can perform well in this area

Finally, investors should also keep in mind that banking is also very popular amongst diversified equity oriented funds.

Happy investing!

Disclaimer: the views expressed are of the author and do not reflect those of Groww.