 "Households are shifting their investment more to equities, directly as well as through mutual funds (MFs), particularly after the pandemic, at the expense of deposits.")
Shriram Mutual Fund (MF) on Monday announced the launch of an industry-first multi-sector rotation fund, which will take concentrated sectoral bets through a quantamental approach. The scheme will invest in 3-6 sectors that are likely to outperform in the near-to-long term.
The fund will move in and out of sectors based on their relative momentum and other factors. "The sectors will be selected based on Shriram AMC’s proprietary Enhanced Quantamental Investment (EQI) framework. These sectors will then be vetted based on fundamentals, including macroeconomic parameters, investment indicators, sentiment, prices, etc., before final sector selection," the fund house said in a release.
The fund will be market-cap agnostic, with the share of largecap, midcap, and smallcap stocks in the portfolio depending on the size of companies operational in the selected sectors.
One of the key advantages, according to the fund house, will be on the tax front. "This is also tax-efficient for the investor, as there is no capital gains tax implication when the fund manager rebalances across sectors within the scheme," said Kartik L Jain, managing director and chief executive officer, Shriram AMC.
The fund is differentiated from flexicap and business cycle funds as it plans to invest only in a limited number of sectors, the AMC stated.
The scheme will be launched on November 18.
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