As a retail Indian mutual fund investor, we can feel your pain and angst. You are at the receiving end of fund managers who claim to be different and more active than the rest. But these tall claims evaporate into thin air, the moment you look at the fund’s holdings and performance.
Most actively managed mutual funds have struggled to beat their benchmark index in the last few years.
Case in point, the biggest large-cap mutual fund in India with an asset under management (AUM) of a whopping Rs 34,584 crore has underperformed its benchmark by a solid 3.55% in the last-one year. For our critics, even over a long time period of say seven years, the fund has outperformed its benchmark by a mere 0.40%. This is despite the fund charging a high expense ratio of 1.69%.
This begs the question, ‘are mutual fund investors being taken for a ride?’ Is your active mutual fund scheme just a façade? Unfortunately, the answer to these questions is a sad, yes.
The Indian mutual fund industry is akin to a child in a straightjacket, being forced to think and act a certain way. Any deviation or out-of-the-box thinking is discouraged and frowned upon. And as the result, it has turned increasingly difficult to distinguish between two mutual funds in the same category. So, till now, investors had no place to go. They were stuck with these barely active mutual fund schemes.
But this is not the case anymore…not since Samco Mutual Fund’s disruptive foray into the Indian mutual fund space. In an environment where it was easy for us to come up with yet another large cap fund, we have decided to take the road less travelled by.
Samco MF’s first offering, Samco Flexi Cap Fund is set to disrupt the Indian mutual fund ecosystem. It is finally the time that Indian investors truly enjoy the benefits of ‘real’ active mutual fund schemes. And Samco Flexi Cap will deliver just that…bold stock selection and active management.
Now we can probably list down more than 100 reasons as to why you should invest in Samco Flexicap Fund. But let me try to build my case with the five most deserving reasons why you should associate with Samco Flexi Cap Fund and then sit back and be proud of your decision. So let’s begin…
5 Reasons to Invest in Samco Flexi Cap Fund
Reason No. 1: Samco Flexi Cap Fund will give you exposure to the most efficient, HexaShield-tested companies in India and across the globe. By efficient companies, we mean companies that can consistently generate high return on capital employed and are resilient across market cycles.
And the most important point is that we are not going to invest in any and every company that we can get our hands on. Samco Flexi Cap Fund will invest in only 25 of the most efficient and HexaShield-tested companies, not only in India but across the globe. Think, Europe, American, Japanese markets etc. When we say global, we truly mean global!
Reason No 2: Samco Flexi Cap Fund will have laser sharp focus on companies with high growth potential. We aim to capture fast growing companies across the world in a mix of 65% Indian and 35% global equities.
Reason No 3: Samco Flexi Cap Fund will counter our biggest issue with the Indian mutual fund industry – Active Management. We are here to redefine what active fund management looks and feels like. Samco Flexi Cap Fund will be a truly active fund with an active share of over 80-85%. What this means is that at any given point in time, 80-85% of the stocks in Samco Flexi Cap Fund’s portfolio will be different compared to its benchmark index.
Reason No 4: Samco Flexi Cap Fund is the first fund in India to disclose Voluntary Dealing Costs (VDCs). Mind you, we aren’t required by law to do so. But this is a testament to our commitment of complete transparency with our investors.
Given that Samco Flexi Cap Fund would buy efficient HexaShield tested and buy them at an efficient price – the compounding will take care of itself with minimal activity and churn. This will ensure a low portfolio turnover ratio and in-turn will ensure low VDCs. The difference in VDCs vis-à-vis other mutual fund schemes could be as significant to the extent of 1-1.50%, which will further uplift the fund’s performance.
Reason No 5: Tax Efficiency is something that only a handful of mutual fund schemes (if any at all) take into consideration. Afterall, they are more bothered about the money coming in. The headache of the tax implications is to be borne wholly and solely by the investor.
But we aren’t that obtuse about your tax needs. Afterall, the higher the tax you pay, the less in-hand return you make and the less happy you are with the fund. This is why even though Samco Flexi Cap Fund will invest in global equities, the 65% minimum allocation to Indian equities means that Indian equity capital gain taxation structure will be applicable on your investments.
This makes Samco Flexi Cap Fund one of the most efficient tax instruments compared to portfolio management services (PMS), alternative investment funds (AIFs) and fully global tax products.
Now as we mentioned earlier, we can probably give you more than 100s of reasons to invest in Samco Flexi Cap Fund. However, we believe that these five reasons are compelling enough. But if that isn’t the case, let us give you a reason that is most important to you… you should invest in Samco Flexi Cap Fund if you are serious about creating wealth. That’s it. This reason supersedes all the other 99+ reasons of why you should invest in Samco Flexi Cap Fund.
With Samco Flexi Cap Fund, we are committed to deliver the following for our valued investors:
1. A truly actively-managed mutual fund with an active share of 80-85%.
2. A well-diversified yet compact portfolio of 25 stocks only.
3. Truly global exposure with 35% of the total corpus invested in efficient companies from around the globe.
4. Investment in truly the best companies which means we will not second-guess our investment calls and exit stocks willy-nilly, resulting in high overall cost of investment.
5. Market-cap agnostic portfolio which will invest in best companies, irrespective of the market capitalisation they belong to. We aren’t scared to dip our fingers into efficient small cap companies as well.
6. And finally, we are committed to delivering high long-term risk adjusted growth to our investors.
We would encourage you to explore the uniqueness of Samco Flexi Cap Fund firsthand. You can also check out this video on Samco Flexi Cap Fund.
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