This is a totally new concept or a mutual fund scheme opened by Edelweiss fund house. The fund herein which is an open ended equity scheme enables investors to participate in the success story of the recently listed 100 companies or companies foraying to enter the capital markets via IPO or initial public offer.
Details of Edelweiss Recently Listed IPO fund:
-The scheme was launched in the year 2018 as a closed ended scheme but now has turned into an open ended one from June 29, 2021. Also, previously the fund was known by the name Edelweiss Maiden Opportunities Fund.
-One of its kind offering exclusive to Edelweiss Mutual fund house.
- NAV of the plan - 18.0812
-Expense ratio: 2.42%, for its direct plan - 1.27%
-Minimum Investment: Rs. 5000 in multiples of Re 1 thereafter
SIP in the fund can be started for Rs. 500
- AUM: Rs. 432 Cr. As on June 30, 2021
-Exit Load: Exit load of 2% if redeemed within 6 months.
- Benchmark-100 IPO TRI
- Return since inception: 17.84%
- Risk category- Very high
- Fund manager: Bharat Lahoti (Since Feb 02, 2018) and Bhavesh Jain (Since Feb 02, 2018).
Where does Edelweiss Recently Listed IPO fund invests?
As the name suggests the fund typically has exposure into newly listed companies (of last 5 years and 100 companies) or companies that are about to open their IPO issues. The exposure is as high as 92 percent as per the fund house.
Top holdings of the fund are Dixon Technologies, Avenue Supermarts, Metropolis Health care , Gland Pharma, ICICI Lombard and HDFC Life Insurance. Together the top 10 holdings account for over 47% portfolio of the fund.
The fund is also invested into debt (4.55%) and (2.65%) in cash & cash equivalents.
Blended investment style with exposure across market capitalisations and largely into large caps.
Why Edelweiss Recently Listed IPO fund?
The IPOs are making their way on the Dalal Street in never before seen count and the valuations as seen by experts are also pretty decent. Hence even if you could not participate in the IPO story as and when the issue got listed or failed to get the shares, herein the fund offers the opportunity to tap in the prospects of these recently listed companies.
Experts are of the view that this can be a safer route to participate in recent IPOs and hence the returns shall not be of the scale that can be gained as in a IPO, implying modest gains for investors if they remain put for a longer term. Nonetheless, typically with concentration around IPOs, there is a higher risk as well. So, investors who have a special penchant for IPOs together with higher risk can certainly bet on this new fund type.
|Fund||1-year return||3-year return||Since launch|
|Edelweiss Recently Listed IPO fund||76.25%||23.28%||18.63%|
Short term gains in case the units are sold before 1-year are taxed at the rate of 15%. After a period of 1 year, gains of up to Rs. 1 lakh shall be tax exempt.
And long term gains amounting to more than Rs. 1 lakh will be taxed at the rate of 10%. In case of dividend income, the income shall be added to taxpayer's other income and taxed as per his or her slab rate.
For dividend higher than Rs. 5000, there shall be deducted a TDS of 10% on such income by the AMC.
So, if you have an extraordinary liking for IPO market and can afford a high degree of risk as this fund is typically centered around recently listed firms or firms about to hit the primary market you can invest in atleast for three years in order for the returns to be more predictable as well as to reduce your risk element in the fund.
Mutual fund investments are risky, further the listed fund is a thematic fund type that is high in risk. So, you need to have to assess your risk profile before heading for such an investment. No investments listed out here, should be construed as investment advice.