L&T mutual fund is launching L&T Emerging Opportunities Fund – Series II,  a closed-ended small-cap fund. The fund has opened for subscription on 7th June and will be in the market till 20th June, 2018.

Key Details of L&T Emerging Opportunities Fund – Series II

NFO Name L&T Emerging Opportunities Fund – Series II
NFO Launch Date 7 June 2018
Last Date for Application 20 June 2018
Minimum Investment Amount ₹ 5000
Fund Type Small Cap Fund
Nature Close-ended
Maturity 1110 days from the day of allotment

Invest in the L&T Emerging Opportunities Fund – Series II

If you want to invest in this NFO, the following steps must be followed.

  1. Log in to your Groww account. If you are a new user,  sign up first– it operates online and takes 2-3 working days.
  2. Decide the amount you would like to invest in L&T Emerging Opportunities Fund – Series II
  3. Email Groww support on support@groww.in with a request or call/Whatsapp on 9108800604.

When investing in this NFO, an investor must remember that it is a close-ended mutual fund. Once an investor invests, he will not be able to touch the money until the maturity date. Also, the investor needs to invest at least ₹ 5000 in it.
Invest only if the investor does not need the money for that duration.

Investment Objective of L&T Emerging Opportunities Fund – Series II

The investment objective of the fund is to give capital appreciation by mainly investing in equity and equity related instruments of small cap scrips.

There is no guarantee that the objective of the fund will be realised and the fund does not guarantee any returns.

Benchmark of L&T Emerging Opportunities Fund – Series II

The Benchmark for this fund is S&P BSE Small Cap TRI (Total Returns Index). This index consists of small cap companies in its portfolio.

Fund Category

L&T Emerging Opportunities Fund – Series II is classified as a small cap fund. Small cap stocks are of small companies of capital market i.e these companies have small market capitalization.

Asset Management Companies offering small-cap funds have very professional fund manager team having knowledge and expertise to pick the right stocks with optimum diversification in portfolio.

Success of these schemes depend on the amount of time invested by Asset Management Companies in researching and finding the right scrip in the small-cap segment.

Options Available:

  • Dividend Payout – Dividend declared under Dividend Payout will be paid out to investors
  • Dividend Sweep – Dividend declared under Dividend Sweep will have the facility to switch out the entire dividend amount to any other fund of L&T Mutual Fund, as selected by the investor at the time of the New Fund Offer.

Benefits of investing in L&T Emerging Opportunities Fund Series II

  • This fund is suitable for investors looking to gain from long term business growth potential of small cap companies
  • This fund is aimed to deliver higher alpha from a longer term perspective
  • This fund diversifies investor’s portfolio
  • This fund is a close ended fund to allow fund manager to take positions in high conviction scrips which have potential to outperform over the medium term
  • Since this is a close ended fund, it also helps in effectively managing the portfolio liquidity which is extremely crucial for investing in small cap stocks

Fund Manager of L&T Emerging Opportunities Fund – Series II

Mr. Vihang Naik:

Mr. Naik is a CFA and TYBMS. Before joining L&T Mutual Fund he was working with L&T Investment Management Limited from July 2012 to June 2016 as an Analyst and with MF Global Sify securities from March 2010 to July 2012

He worked at Motilal Oswal Securities from May 2008 to March 2010, SBICAP Securities from Oct 2006 to April 2008 as a Research Analyst. This shows the work experience that he possesses and the different profiles he has held in different companies.

Funds Managed by Mr. Vihang Naik:

  • L&T Midcap Fund– since Jun 2016
  • L&T Long Term Advantage Fund – I – since Oct 2016
  • L&T Emerging Opportunities Fund Series I – Regular Plan – since Jan 2018
  • L&T Emerging Opportunities Fund – Series II

L&T Mutual Fund

L&T Mutual Fund is a mutual fund company in India. The Asset Management Company (AMC) for all L&T Mutual Fund schemes is L&T Investment Management Limited which is one of the premier mutual funds in India and caters to the investment needs through a suite of mutual fund schemes.

Mutual Fund L&T Mutual Fund
Setup Date Jan-03-1997
Incorporation Date Apr-25-1996
Sponsor L&T Finance Holdings Limited
Trustee L&T Mutual Fund Trustee Limited
Chairman N.A
CEO / MD Mr. Kailash Kulkarni
CIO Mr. Soumendranath Lahiri
Compliance Officer Ms. Pushpavathi Kaundar
Investor Service Officer Mr. Ankur Banthiya
Assets Managed Rs. 65931.65 crore (Mar-31-2018)

Who Should Invest?

This product is suitable for investors who are seeking:

  • Long term Capital Appreciation
  • Investment in a basket of equity and equity related instruments, investing majorly in small cap stocks

Why consider investing in L&T Emerging Opportunities Fund- Series II now?

  • The small cap rally is probable to be mainly driven by economic growth
  • Historically, small caps tend to have higher profit growth rate, whenever there is an economic recovery in the domestic market.
  • Indian economy is showing early signs of recovery supported by policy reforms and many other initiatives
  • We can see political stability in the country which is a favourable scenario for medium to long-term economic growth.
  • Within the small cap market, there are a large number of scrips available at reasonable valuation levels while some have higher valuations.
  • Opportunity for bottom-up stock picking as there are a lot of smaller companies which are profitable and exhibiting growth potential. 

Investment Strategy of L&T Emerging Opportunities Fund – Series II

The fund will be needed to invest 65 to 100% of its assets in the scrips of small cap companies, 0 to 35% in other types of companies and 0 to 20% in debt.

The fund will have the S&P BSE Small Cap TRI (Total Returns Index) as the benchmark. Its tenure will be 1110 days or approximately 3 years and one month from the date of issue.

Instruments Allocation (% of total assets)
Equity and equity related securities of small cap companies 65 – 100
Equity and equity related securities of companies other than small cap companies 0- 35
Debt and money market instruments 0 -20

What does the fund look for in Small Cap Companies?

Though smaller companies have the potential to grow at a higher rate, not all smaller companies would grow to become mid or large cap companies.

The key is to identify companies with scalable opportunities
, competent management,
 strong corporate governance practices, balance sheet strength
, and competitive edge

Performance of L&T Emerging Opportunities Fund – Series I

This fund was launched in the month of February. Its return this year has been in negatives but has been atleast better than its benchmark. The fund manager has done a good job of managing the fund in an effective way for the past couple of months.

Conclusion

Investors willing to invest their money in small cap stocks while compromising their liquidity at the same time can definitely look to invest in this fund. Small cap stocks has given very good returns over the past couple of years.

Investors looking to take less risk can invest in Large Cap and Balanced mutual funds.

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