The banking and financial services sector hasn't had such a good time of late. Banking stocks have shed more than the stocks from other industries in the ongoing market meltdown. The equity-banking category has been predictably affected by this and has witnessed losses higher than the Sensex in recent times. However, despite the sector's recent performance, it seems that fund houses haven't lost faith in it as yet. A host of positives, including the much-awaited round of reforms in March 2009, seem to have kept hopes of the sector becoming bankable again.
A sign of this faith is the recent spate of new banking funds. Since May, 2008, four new banking funds have been launched, the latest of which is the Sahara Banking & Financial Services Fund. This fund becomes the seventh fund to enter the equity-banking category.
The Sahara Banking & Financial Services Fund is just like any of its counterparts. It is an open-end sector fund that seeks to invest in shares of companies whose business comprise of Banking or Financial Services, either whole or in part. The scheme would predominantly invest in securities included in its benchmark - S&P CNX Bank Index. It also aims to have a reasonably diversified portfolio. The equity exposure would range between 75-100 per cent, while up to 25 per cent of its assets can be invested in debt and money market instruments.
The last six months have seen the banking funds shed the maximum as compared to other categories and hence, shares of banks and financial companies are available at cheap valuations. Fund houses seem to have faith on the sector's potential in the future and are eyeing great bargains. Maybe, Sahara Banking & Financial Services Fund will turn out to be the lucky 7th!
Issue opening date: July 28, 2008
Issue closing date: August 26, 2008
Fund manager: A.N. Sridhar
Type: Open End
Benchmark: S&P CNX Bank Index
Minimum investment: Rs. 5000/- and in multiples of Re. 1/- thereafter
Entry Load: 2.25 per cent
Exit Load: Nil