IDBI Mutual Fund has launched IDBI Long Term Value Fund, an open-ended fund which will follow a value investing strategy. Although there is no universal definition of ‘value investing’, it broadly means finding relatively undiscovered stocks which are rated lower than their potential by the market. The theme is gathering popularity in a sluggish market with recent launches like Tata Value Fund Series 2. The IDBI NFO opens today (30th July) and will close on 13th August.
The fund will invest 65-100% of its assets in equity, 0-35% in debt and 0-10% in units of REITs and InVITs. Uma Venkataraman who manages several other IDBI equity funds will be the fund manager. The S&P BSE 500 Total Returns Index will be the benchmark for this fund.
As an AMC, IDBI has six actively managed equity funds and they are all underperformers. The highest rating any of them has achieved on Value Research is three stars out of five (IDBI Equity Advantage Fund). The ratings agency usually recommends that investors should consider a universe of 4-5 star funds.
|Fund||Launch Date||3 year return||Benchmark return||Outperform?|
|IDBI Diversified Equity Fund||March 2014||8.42%||12.62%||No|
|IDBI Equity Advantage Fund||September 2013||8.98%||12.44%||No|
|IDBI Focused 30 Equity Fund||November 2017||N/A||N/A||N/A|
|IDBI India Top 100 Equity Fund||May 2012||7.24%||12.36%||No|
|IDBI Midcap Fund||February 2017||N/A||N/A||N/A|
|IDBI Small Cap Fund||June 2017||N/A||N/A||N/A|
Source: Value Research, Data as of 30th June 2017
The parent bank has also been in the news for huge NPA levels (Non-Performing Assets). With such a poor AMC record and a lack of its own track record (because it is a new fund), there is very little reason to invest in IDBI Long Term Equity.
Fund Manager: Uma Venkataraman
NFO Period: 30th July to 13th August
Benchmark: S&P BSE 500 (TRI)
Minimum Application Amount: Rs 5,000