Samco Mutual Fund launches flexi-cap fund

On Samco Mutual Fund's debut fund launch, we spoke with Umesh Kumar Mehta. Watch the video where he elaborates on the driving forces for Samco group to get into the mutual fund business, the investment philosophy at the AMC, how they intend to add value in a crowded space and the roadmap of their journey ahead.

Several firms have applied for mutual fund licenses in the last couple of years, and some have already got SEBI's go-ahead. One of them is Samco Asset Management Pvt. Ltd., sponsored by Samco Securities Limited, an equity brokerage firm headquartered in Mumbai and founded in 2015 by Jimeet Modi, Group CEO.

The fund house would be starting their journey with the launch of their fund in the flexi-cap category. The scheme's new fund offer (NFO) is open for subscription from January 17, 2022, and will close on January 31, 2022. Nirali Bhansali will manage the domestic equity portion of the scheme, while Dhawal Dhanani is the dedicated fund manager for overseas investments. The fund is benchmarked against the Nifty 500 Index TRI. Here are the key details of the new fund offer.

As part of the launch of this fund, the fund house has released a 'Unitholders Handbook' where it has tried to provide an understanding of what the AMC would be trying to do, what it won't do and how it plans to stick to a disciplined plan to achieve its objective. The handbook states that the AMC aims to pioneer the concept of stress testing and truly active investing while being highly transparent.

We interacted with the AMC's CEO, Umesh Kumar Mehta, on the occasion of the launch of their debut fund. Elaborating on the concept of stress-tested investing, he stated, "Stress tested investing is deploying money in those businesses that can survive and endure stress or a variety of shocks in the economy and are also able to generate high risk-adjusted returns. So why stress-tested investing? Because the life of businesses is getting shorter nowadays because of venture capital funding, infinite technological disruptions, etc. So that is the reason why out of the 30 Sensex companies 20 years ago, only six are in existence today. For that matter, out of Fortune 500 companies, half have disappeared in the last 15 years, Evergrande being one of the latest examples."

The AMC states that Samco Flexi Cap Fund would follow the 3E strategy, i.e., investing in efficient companies at an efficient price and maintaining efficient costs to build a portfolio designed to generate a high risk-adjusted return. Though the fund would operate as a flexi-cap, it aims to build a portfolio of about 25-stock portfolios which they believe provides a great balance of diversification and concentration. The scheme will follow a growth investing strategy investing in Indian and global equities in a ratio of 65:35.

Over the last year or so, we have seen that many fund houses make provisions to invest in foreign securities and have a dedicated fund manager for the same. But we are yet to see any foreign equity allocation in them. On the matter, AMC's CEO said that "On day one, the moment we get the funds, we have nine international and 16 domestic names ready wherein up to 35 per cent we will invest in international stocks and 65 per cent will be in domestic. So this is what we will maintain, and this ratio will more or less remain throughout the scheme's life. "

Shedding light on their future product line-up, the CEO said that the AMC is in the process of launching its ultra-short duration fund, as a parking fund, in the next couple of months or so. After that, they have a global equity fund and an ELSS fund in the pipeline, which they aim to launch before the end of this year.