Baroda BNP Paribas Flexi Cap Fund NFO launched

Baroda BNP Paribas Mutual Fund is coming out with a NFO in the form of Baroda BNP Paribas Flexi cap Fund.

Baroda BNP Paribas Flexi cap Fund would be a flexi cap fund with no restriction to any caps.

The fund would be open for subscription from July 25, 2022 to August 08, 2022.

NFO details for Baroda BNP Paribas Flexi Cap Fund

Scheme Opens	25/07/2022
Scheme Closes	08/08/2022
Fund Manager	Mr. Sanjay Chawla Mr. Sandeep Jain
Benchmark	Nifty 500 TRI
Minimum Investment	5,000
Fund Category	Flexi Cap
Exit Load	If redeemed/switched within one year from date of allotment: For 10% of investment: Nil 1% for investment Nil If redeemed/switched after one year

Baroda BNP Paribas Flexi Cap Fund would be an open – ended dynamic equity fund with freedom to invest across large, mid and small cap stocks with no restriction with respect to caps.

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Baroda BNP Paribas Flexi Cap Fund Investment Objectives

The investment objective of the fund is to generate long term growth while identifying and investing in opportunities across market caps through an in house market cap model.

There is no guarantee that the investment objectives of the scheme would be achieved.

Baroda BNP Paribas Flexi Cap Fund Allocation

The asset allocation for the fund would be something like this

Asset Class	Minimum %	Maximum %
Equity and Equity Related instruments of large, mid and small cap companies	65	100
Debt and money market instruments	0	35
Units issues by REITS and InvITs	0	10

The above figures are only indicative and not fixed, the fund managers have the liberty to move across the asset classes depending upon prevailing market conditions as long as they remain within the mandate permitted.

The fund can also invest in REITs and InvITs if so desired.

A nfo means a new fund from a mutual fund house which was not available earlier.

With growing acceptance of mutual funds as a form of investment, mutual fund houses periodically introduce new fund offers so as to complete their basket of investments available for investors.

A NFO is usually what results in the beginning of a mutual fund scheme.

Other reasons being merger of schemes within the same fund house or merger or acquisition of two or more fund houses, these are rare instances though.

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NFO meaning

A nfo or a new fund offer is a method by which a mutual fund scheme raises the initial investment into the fund.

The new fund offer is available for purchase for a limited number of days only.

After which it becomes unavailable for fresh purchase or redemption for a couple of days.

Once this time duration is complete, the nfo no more remains a nfo and is treated like any other open ended mutual fund scheme.

In which you can invest and redeem as and when you please, considering it is an open ended fund and you comply with the necessary exit load calculations.

What is a flexi cap mutual fund?

A flexi cap mutual fund needs a minimum of 65% investment in equities at all times.

There is no restriction with regards to caps or sectors.

There is no restriction with regards the remaining 35% as well.

The fund manager can invest the remaining 35% as per her wish in any of the following:

Domestic Equity
International Equity
Cash
Debt

What is imperative is that 65% at all times is invested in equities to qualify as a flexi cap fund.

Basically, a flexi cap fund is exactly what a multi cap fund used to be earlier before the new rules set in, the only change is in the name.

Difference between multi cap and flexi cap mutual fund

A flexi cap fund needs a minimum of 65% investment in equity.	A multi cap fund needs a minimum of 75% investment in equity.

No compulsory investment in mid and small cap stocks	A multi cap fund needs to compulsorily invest a minimum of 25% each in mid and small cap stocks.

It can invest its complete portfolio into large cap stocks if needed.	It can invest only up to 50% of its complete portfolio in to large cap stocks at any given time.

Needs a lower minimum exposure to equity as compared to a multi cap fund.	Needs a higher minimum exposure to equity as compare to a flexi cap fund.

Should you invest in a nfo?

You can consider it if:

The new fund offer is a category of fund that is not existent in your mutual fund portfolio.

If it is going to be a part of your satellite portfolio.

If it adds a unique touch to your mutual fund portfolio.

If you understand the functioning, objectives and risks attached with the new fund offer.

The nfo mutual fund is aligned with your risk profile.

You should avoid it if:

The new fund offer is not going to add anything of unique significance to your mutual fund portfolio.

If the nfo is going to be a part of your core portfolio.

If the only reason you are investing is due to FOMO (Fear of missing out).

If you do not understand the investment style and risks attached with the nfo.

The nfo mutual fund is not aligned with your risk profile.

For portfolio enquiries, email us with your doubts at info@themutualfundguide.com

Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.

Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing