Publish Date:
Edelweiss Mutual Fund has launched Edelweiss Business Cycle Fund. The fund house is of the view that since sectors' returns can be cyclical, investing in just one can expose an investor to volatility. Thus, Business cycle funds can offer a diversified approach, strategically allocating and rotating across sectors in different market environments.
Edelweiss Business Cycle Fund is an open-ended actively managed equity scheme. It aims to invest in trending businesses by combining momentum with other factors such as value, growth, and quality.
It is a thematic fund that aims to generate capital appreciation by investing predominantly (minimum 80% of its assets) in equity and equity-related securities with a focus on stocks and sectors that are likely to do well in a particular business cycle. The fund will follow the top-down approach of portfolio construction to identify the stage of business cycle, through domestic and global risk appetite and liquidity analytics, to arrive at a risk on/risk off assessment for sectors.
[Read: These Thematic Mutual Funds Offered Over 50% Returns In 1 Year. Should You Invest in Them?]
The fund manager of Edelweiss Business Cycle Fund will consider macro-economic parameters, consumer sentiment 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 the business environment. The factors to be considered may include:
(i) Macro Economy (Global economic growth, Monetary policy stance, Liquidity, geopolitics);
(ii) Domestic Economy (Economic growth outlook, monetary and fiscal policy, credit cycle, rural and urban economy);
(iii) Government Policy Reforms (Production Linked incentives, digitization, tax boost, Goods & Services Tax implementation, etc.);
(iv) Private Consumption & Capex (demand for goods, services, housing, capex demand, etc.).
Edelweiss Business Cycle Fund selects stocks from the top 300 companies in terms of market capitalisation. It then calculates scores for each stock across factors (quality, growth, value, and momentum). Subsequently, it selects top-ranked stocks from each factor combination based on their scores (Value+Momentum; Growth+Momentum; Quality+Momentum). The fund aims to maintain equal allocation between large caps and mid/small caps.
Edelweiss Business Cycle Fund is benchmarked against the Nifty 500 – TRI. The underlying benchmark index represents top 500 companies selected based on full market capitalisation.
The following stocks and sectors are currently the top constituents of the Nifty 500 Index – TRI.
Data as of June 28, 2024
(Source: NSE Indexogram Factsheetniftyindices.com)
Edelweiss Business Cycle Fund will be managed by Mr Bhavesh Jain and Mr Bharat Lahoti.
Mr Bhavesh Jain is the Co-head, Factor investing at Edelweiss AMC. His qualifications include MMS and MBA in Finance. Bhavesh started his career with Edelweiss AMC in January 2008 and has over 15 years of rich experience in the financial markets. He had joined in the Low Risk Trading team which is responsible for looking at arbitrage between SGX Nifty and NSE Nifty along with normal cash-future and index arbitrage.
Mr Bharat Lahoti is the Co-head, Factor investing at Edelweiss AMC. His qualifications include MMS in Finance and BE in Electronics and Telecom. Bharat has 16 years of experience in areas of portfolio management, macro and sector research. His last assignment before joining Edelweiss AMC was with DE Shaw Group, a global hedge fund, as a senior manager working on fundamental and quantitative research ideas.
Edelweiss Business Cycle Fund is open for subscription from July 09, 2024 to July 23, 2024. The fund will reopen for continuous sale and repurchase within August 06, 2024.
The fund offers Direct Plan and Regular Plan. Under each plan the fund offers Growth, Income Distribution cum Capital Withdrawal – Payout, and Reinvestment of IDCW options.
The minimum subscription amount is Rs 100 and any amount thereafter.