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Bank of India Mutual Fund has launched Bank of India Business Cycle Fund
It is an open-ended equity scheme investing in sector based on its business cycle
Business cycle mutual funds are a type of equity fund that strategically allocate investments based on the different phases of the economic cycle, such as expansion, peak, contraction, and recovery. These funds aim to capitalize on sectors that are expected to perform well during specific stages of the economic cycle.
These funds require a deep understanding of macroeconomic trends and the ability to accurately predict which sectors will benefit or suffer during different phases of the business cycle. While this approach can lead to significant gains if executed well, it also carries the risk of misjudging the timing or intensity of economic shifts.
Amid the current economic uncertainty, several fund houses have introduced business cycle funds to capitalize on the opportunities presented by these economic shifts. Recently, Motilal Oswal Mutual Fund launched the Motilal Oswal Business Cycle Fund.
[Read: Navigating the 2024 Market Volatility: Key Investment Strategies for Your MF Portfolio]
The Investment objective of the Scheme is to generate long term capital appreciation by investing predominantly in equity and equity related securities through dynamic allocation between various sectors and stocks at different stages of business cycles in the economy. However, there is no assurance that the investment objective of the Scheme will be achieved.
Under normal circumstances, Bank of India Business Cycle Fund will hold an allocation of 80% to 100% in Equity & Equity related instruments selected on the basis of business cycle theme, 0% to 20% Debt and Money Market instruments (including cash and cash equivalents) and 0% to 10% in Units issued by REITs and InvITs.
Bank of India Business Cycle Fund aims to generate capital appreciation by investing predominantly in equity and equity related securities with a focus on navigating business cycles through dynamic allocation between various sectors and stocks at different stages of business cycles in the economy.
The fund management would involve active allocation between sectors, stocks and Styles based on the stages of business cycles in the economy. The fund manager will consider macro and micro economic parameters and overlay it with an internal, proprietary model using fundamental and technical analysis of stocks to arrive at the portfolio which will comprehend the sectors, stocks and style which will suit investment objective of the scheme.
The stock selection of the scheme would emphasize on identifying companies with sound corporate managements and prospects of good future growth. The fund managers will favour companies that offer the best value relative to their respective long-term growth prospects, returns on capital and management quality.
Bank of India Business Cycle Fund is benchmarked against the Nifty 500 TRI
Bank of India Business Cycle Fund will be managed by Mr Alok Singh.
SBI Innovative Opportunities Fund is open for subscription from August 09, 2024 to August 23, 2024. The fund will reopen for continuous sale and repurchase on September 02, 2024.
The minimum subscription amount is Rs 5,000/- and in multiples of Re. 1 thereafter.
The fund offers Direct Plan and Regular Plan. Under each plan the fund offers Growth option and Income Distribution cum Capital Withdrawal.
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