Mutual Fund News : Canara Robeco Mutual Fund Introduces Canara Robeco Value Fund

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Canara Robeco Mutual Fund (MF) has launched an open-ended equity scheme - Canara Robeco Value Fund.

The scheme endeavors to follow a value investment strategy.

Accordingly, the investment objective of the scheme is to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity related instrument, with higher focus on value stocks. There is no assurance or guarantee that the investment objective of the scheme will be realized.

Under normal circumstances, 65% to 100% of the fund’s portfolio will be invested in equity & equity related instruments. The scheme may also invest upto 35% of its assets in Debt & Money Market Instruments, and may seek to invest upto 10% of its net assets in Units issued by REITs and InvITs. It can also invest upto 5% of its assets in Units of MF schemes and upto 10% in Equity Exchange Traded Funds.

The investment strategy of Canara Robeco Value Fund as mentioned in the Scheme Information Document (SID) is as follows:

In medium-long term, stock price would follow changes in intrinsic value of the company. Canara Robeco Value Fund would follow a philosophy of identifying mispriced opportunities between the intrinsic value and the market price of a company to make an investment decision.

Market participants typically overreact on positive & negative news leading to changes in investment rationale for buying / selling a company. Due to overreaction to news, stock prices do not reflect the intrinsic value of the underlying business.

This strategy would look at overreaction of market participants to the short-term developments in industries/companies and exploit available opportunities for investment returns. This strategy also relies on the analytical and behavioral edge to generate investor alpha.

Canara Robeco Value Fund will aim to invest predominantly equity and equity related instruments with an aim to generate long term capital appreciation from a diversified portfolio of predominantly equity and equity related securities with higher focus on stocks trading below their intrinsic value with a sufficient amount of margin of safety.

Under the strategy, for the purpose of calculation of intrinsic value, it will be a function of earnings power of the business, opportunity size and ability to lower cost of capital. The companies may take some time to revert to their underlying intrinsic value.

This strategy will ride on the time lag and intend to make profits for investors by exploiting these anomalies. Behavioral investing would help keep long term potential of companies in mind and invest in these companies without bias towards short term negatives.

Canara Robeco Value Fund would adopt a bottom-up stock selection approach with strong focus on valuations to spot businesses whose stocks have a potential better return opportunity over medium to long term. The fund would invest across market capitalization and sectors with adequate margin of safety to reduce risk in a volatile market environment.

The fund manager will evaluate companies on robustness of business fundamentals, competency of management and valuation in comparison to its earnings growth prospects and historical long-term valuation.

Canara Robeco Value Fund’s performance will be benchmarked against S&P BSE 500 TRI (Total Return Index).

Canara Robeco Value Fund will be managed by Mr Vishal Mishra.

The NFO opens for subscription on August 13, 2021, and closes on August 27, 2021. The scheme will reopen for continuous sale and repurchase on September 06, 2021.

The minimum subscription amount is Rs 5,000 and in multiples of Re 1 thereafter.

The fund offers Regular Plan and Direct Plan having Growth Option and Income Distribution cum Capital Withdrawal Option (Re-investment and Pay-out facility).