Mutual Fund News : IDFC Mutual Fund Introduces IDFC US Equity Fund of Fund

Publish Date:

IDFC Mutual Fund has launched an open-ended fund of fund scheme - IDFC US Equity Fund of Fund.

The scheme will be investing its assets in in units/shares of overseas Mutual Fund Scheme (/s) / Exchange Traded Fund (/s) investing in US Equity securities.

IDFC US Equity Fund of Fund seeks to generate long term capital appreciation by investing in units/shares of overseas Mutual Fund Scheme (/s) / Exchange Traded Fund (/s) investing in US Equity securities.

However, there can be no assurance that the investment objective of the Scheme will be realized.

IDFC US Equity Fund of Fund is mandated to invest 95% to 100% of its net assets in Units/Shares of overseas Mutual Fund Scheme (/s) / Exchange Traded Fund (/s) investing in US Equity securities* and 0% to 5% of the net assets in Debt Securities, Money Market Instruments, and/or units of Debt and Liquid schemes.

*The scheme intends to invest maximum of USD 400 million in Overseas securities / Overseas ETFs. This limit will be applicable for a period of six months from the date of closure of NFO, subject to overall limit of fund house up to maximum of US$ 1 billion. In case of investment in overseas ETFs, the overall ceiling of fund house will be subject to a maximum of US $ 300 million.

IDFC US Equity Fund of Fund shall follow a passive investment strategy and will invest in units/shares of overseas Mutual Fund Scheme (/s) / Exchange Traded Fund (/s) investing in US Equity securities, except to meet its liquidity requirements.

The underlying Mutual Fund (/s) will be selected after requisite due diligence with respect to product performance, risk management practices deployed, experience and track record of fund manager among other parameters.

The list of underlying funds are as follows*:

  • JPMorgan Funds – US Growth Fund; Class: JPM US Growth I (acc) USD:

    This scheme aims to provide long-term capital growth by investing primarily in a growth style biased portfolio of US companies. It uses a fundamental, bottom-up stock selection process and Targets companies with strong fundamentals that have the ability to deliver higher earnings growth than market expectations.

    At least 67% of its assets invested in a growth style biased portfolio of equities of companies that are domiciled, or carrying out the main part of their economic activity, in the US.

  • iShares Russell 1000 Growth ETF:

    The ishares Russell 1000 Growth ETF seeks to track the investment results of an index composed of large- and midcapitalisation U.S. equities that exhibit growth characteristics. The Fund generally invests at least 90% of its assets in securities of the Underlying Index and in depositary receipts representing securities of the Underlying Index. The Fund may invest the remainder of its assets in certain futures, options and swap contracts, cash and cash equivalents, including shares of money market funds advised by BFA or its affiliates, as well as in securities not included in the Underlying Index, but which BFA believes will help the Fund track the Underlying Index.

    The Underlying Index is sponsored by Russell, which is part of the London Stock Exchange Group and is independent of the Fund and BFA. The Index Provider determines the composition and relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the Underlying Index. BFA = BlackRock Fund Advisors i.e. the Investment Advisor.

  • Vanguard Russell 1000 Growth ETF

    The Fund invests in stocks in the Russell 1000 Growth Index, a broadly diversified index predominantly made up of growth stocks of large U.S. companies and seeks to closely track the index’s return, which is considered a gauge of large-cap growth U.S. stock returns. Further it offers high potential for investment growth; share value typically rises and falls more sharply than that of funds holding bonds and more appropriate for long-term goals.

*The list of schemes provided is indicative and IDFC US Equity Fund of Fun can invest only in similar mutual fund/s or exchange traded fund/s with similar investment strategy, similar investment objective, similar asset allocation, similar benchmark.

IDFC US Equity Fund of Fund is not a dedicated Feeder fund and investment in underlying fund will be undertaken subject to fulfilment of documentation and regulatory requirements applicable for investing in the underlying fund. The scheme would also invest in units of Liquid/ debt schemes, debt and money market instruments.

IDFC US Equity Fund of Fund’s performance will be benchmarked against Russell 1000 Growth Index (Total Return Net of 30% withholding tax).

The fund will be managed by Mr Viraj Kulkarni.

The NFO opens for subscription on July 29, 2021, and closes on August 12, 2021. The scheme will reopen for ongoing subscription and redemption within five business days from the date of allotment of units.

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 (IDCW) Option (Re-investment and Pay-out facilities).