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WF: In what ways will this new fund be different from your flagship product Union Equity Fund@?
Ashish: Union Focussed Largecap Fund would have a higher proportion of large caps* (minimum 80%) than Union Equity Fund. Union Focussed Laregcap Fund would have approximately 20-30 stocks in the portfolio as compared to Union Equity Fund which has presently approximately 40 stocks in the portfolio. The ability to take concentrated bets in a few high conviction stocks would be the key differentiator for Union Focussed Laregcap Fund. The large cap portion under Union Focussed Laregcap Fund would comprise of stocks which have delivered consistently over a long period of time and are expected to do the same in the future and also of stocks expected to deliver high growth.
WF: Who will be the target investors for Union Focussed Largecap Fund and how will that contrast with the target investors for Union Equity Fund?
Ashish: The investment strategy for both the funds is different. Both being equity funds, are suitable for investors having a higher risk profile, looking for long term capital growth. However, with a focussed strategy, the portfolio of Union Focussed Laregcap Fund would be aiming for long term consistent returns and will consist majorly of sector leaders. Being focussed, it has a higher probability of generating better returns vis-Ã -vis the benchmark index.
WF: Concentrated portfolios intuitively suggest higher alpha potential, yet a very tiny fraction of equity assets goes into funds with concentrated portfolios. Why do you think this is happening?
Ashish: The perception is that concentrated portfolios are riskier. Also, the total number of concentrated funds in the market as compared to diversified open ended equity funds is very less.
WF: In a market where concerns on valuations persist, which pockets of large caps offer good value at this point, in your view?
Ashish: Our focus will be on long term growth and consistency of this growth. The Indian economy offers a good platform for growth for companies from various sectors. Very few of these companies have been able to deliver consistent growth in the past. Our research suggests that over the last 10 years, even the expensive companies from a valuation point of view, have delivered stellar returns on account of high growth.
WF: When you cast the initial portfolio of your new fund, which are likely to be the sectors with highest active overweight positions and why?
Ashish: Union Focussed Largecap Fund would be more biased towards companies rather than the sectors which they operate in.
WF: What is your overall outlook on markets for this fiscal year and what do you see as the key drivers from here on?
Ashish: We remain positive on the markets with the Goods and Services Tax (GST) being the key driver for the Indian markets.
*Top 100 companies by market capitalization.
^Product Label of Union Focussed Largecap Fund (An Open-ended Equity Scheme):
@Product Label of Union Equity Fund (An Open-ended Equity Scheme):
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
Disclaimer: The views expressed or statements made in this document are purely the views of the author and do not necessarily represent the views of either Union Asset Management Company Private Limited or its affiliates. The views, facts and figures in this document are as of April 18, 2017, unless stated otherwise, and could change without any notice.
Statutory Details: Constitution: Union Mutual Fund (formerly Union KBC Mutual Fund) has been set up as a Trust under the Indian Trusts Act, 1882; Sponsor: Union Bank of India; Trustee: Union Trustee Company Private Limited (formerly Union KBC Trustee Company Private Limited), [Corporate Identity Number (CIN): U65923MH2009PTC198198], a company incorporated under the Companies Act, 1956 with a limited liability; Investment Manager: Union Asset Management Company Private Limited (formerly Union KBC Asset Management Company Private Limited), [Corporate Identity Number (CIN): U65923MH2009PTC198201], a company incorporated under the Companies Act, 1956 with a limited liability. Registered Office: Unit 802, 8th Floor, Tower 'A', Peninsula Business Park, Ganpatrao Kadam Marg, Lower Parel (West), Mumbai - 400 013.Toll Free No. 18002002268 ? Non Toll Free. 022-24833333 ? Fax No: 022-24833401 ? Website: www.unionmf.com ? Email: investorcare@unionmf.com. For further details regarding Union Focussed Largecap Fund please refer to the Scheme Information Document (SID) and our website www.unionmf.com. Copy of all Scheme related documents along with the application form can be obtained from any of our AMC offices/ Customer Service Centres/distributors as well as from our website www.unionmf.com.
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NFO: Union Focussed Largecap Fund