NJ Mutual Funds has launched a new fund offer for the NJ Flexi Cap Fund. This open-ended fund invests in large, mid and small cap stocks. Over the past five years, FlexiCap mutual funds have generated an average return of 13% across mutual fund schemes. The hard truth is that some flexicap funds were generated below bank FD rates.should i invest NJ Flexi Cap NFOWho can invest in such flexicap mutual fund schemes?
NJ Flexi Cap Fund – NFO Issue Details
Learn more about NFOs here.
| NFO open | August 15, 23 |
| NFO Closing | August 29, 23 |
| Schemes for continuous purchases/sales are reopened | Within 5 business days from the date of allocation |
| Minimum application amount | 500 rupees, thereafter in multiples of 1 rupee |
| Minimum SIP | 500 rupees for 6 months |
| NAV of the fund | 10 rupees during NFO period |
| entry road | Nothing |
| end of load | 1% exit load if redeemed at less than 5% within 30 days |
| danger | very high risk |
| standard | Nifty 500 Index (TRI) |
| fund manager | Mr. Sanjay Benbarkar Mr. Hardick Bora |
NJ Flexi Cap Fund SID Prospectus
What is the investment objective of NJ Flexi Cap Fund NFO?
The investment objective of the scheme is to generate long-term capital growth by investing in equities and equity-related instruments across market capitalization.
However, there is no guarantee that the investment objective of the scheme will be achieved..
What is the allocation pattern of this fund?
The investment pattern of this fund is as follows:
| instrument type | minimum% | maximum% | risk profile |
|---|---|---|---|
| Stocks and stock-related products | 65% | 100% | medium to high |
| Debt and money market securities | 0% | 35% | low to medium |
Why invest in NJ Flexi Cap Fund NFO?
Here are some reasons to invest in this fund.
- The fund invests across the entire market capitalization i.e. large, mid and small cap segments and provides diversification.
- We have observed in the past that large-cap stocks tend to provide stable returns, while mid-cap and small-cap stocks tend to provide superior returns. Therefore, flexicap funds with such combinations are likely to generate higher returns.
- A unique flexi-cap fund that invests based on its own rules-based SMART beta platform.
Risk factors for this flexicap fund.
You should consider some of these risk/negative factors before investing.
- The fund invests in mid and small cap stocks which are inherently high risk.
- Investing in small-cap stocks can present liquidity issues.
How are the existing Flexi Cap funds performing in India?
Below is the performance of the FlexiCap mutual fund scheme.
| scheme name | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| Quant Flexi Cap Fund | 19% | 36% | twenty three% | twenty five% |
| Parag Palik Flexicap Fund | 15% | twenty four% | 18% | 20% |
| PGIM India Flexi Cap Fund | 9% | twenty four% | 17% | – |
| JM Flexi Cap Fund | twenty three% | 29% | 16% | 20% |
| HDFC Flexi Cap Fund | 20% | 31% | 16% | 19% |
| Union Flexicap Fund | 13% | twenty four% | 15% | 15% |
| Kanara Robeco Flexi Cap Fund | 9% | twenty two% | 14% | 16% |
| DSP Flexi-Cap Fund | 13% | twenty three% | 14% | 18% |
| Nabi Flexi Cap Fund | 15% | twenty four% | 14% | – |
| Franklin India FlexiCap Fund | 16% | 29% | 14% | 18% |
| Edelweiss Flexicap Fund | 13% | twenty five% | 14% | – |
| SBI Flexicap Fund | Ten% | twenty three% | 12% | 19% |
| Kotak Flexicap Fund | 12% | twenty one% | 12% | 18% |
| Aditya Birla Sun Life Flexi Cap Fund | 11% | twenty two% | 12% | 19% |
| Axis FlexiCap Fund | Four% | 17% | 12% | – |
| UTI Flexi Cap Fund | 3% | 19% | 12% | 16% |
| HSBC Flexi Cap Fund | 14% | twenty three% | 11% | 17% |
| LIC MF Flexi Cap Fund | 12% | 19% | 11% | 13% |
| Bandhan Flexi Cap Fund | 8% | twenty one% | Ten% | 16% |
| Taurus Flexi Cap Fund | 8% | 18% | 7% | 12% |
| Motilal Oswal Flexi Cap Fund | 9% | 14% | 7% | – |
| Bank of India Flexicap Fund | 16% | 29% | – | – |
| Shri Ram Flexi Cap Fund | 8% | 18% | – | – |
| Tata Flexicap Fund | 11% | 19% | – | – |
Should I invest in the NJ Flexi Cap Fund NFO?
The NJ Flexi Cap Fund New Fund Offer invests in the entire market capitalization: large-cap, mid-cap, and small-cap.
On the plus side, large-cap stocks offer stable returns, while mid-cap and small-cap stocks have the potential to generate higher returns. Such funds help diversify an investor’s portfolio.
On the downside, exposure to the mid and small cap segment is high risk. There are several other flexicap mutual funds that have returned below the bank FD rate over the past five years.
High-risk investors can invest in such funds with a medium- to long-term perspective. Alternatively, you can invest in existing FlexiCap mutual funds that have already proven their performance over various market cycles.
Suresh KP is the founder of Myinvestmentideas. He is his NISM Certified – Investment Advisor and he is a NISM Certified – Research Analyst. He has been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
