PGIM India Mutual Fund has filed an offer document with Sebi to launch an open-ended equity fund PGIM India Focused Equity Fund that will invest in equity and equity-related instruments of a maximum of 30 companies across the market capitalization.
The investment objective of the scheme is to generate long-term capital growth from a diversified portfolio of equity and equity-related securities of predominantly large-cap companies.
If the scheme decides to invest in foreign securities including overseas exchange-traded funds, it will not exceed 25% of the net assets of the scheme.
In terms of investment strategy, “the scheme shall primarily use a bottom-up approach to identify companies with sound management and good growth prospects and a top-down approach for macro and thematic analysis. The portfolio manager would select companies with stable or high growth with due consideration to valuation,” according to the scheme information document filed with Sebi.
The portfolio managers are expected to consider a range of quantitative and qualitative factors such as the company’s business prospects, historical and present financial condition, capital allocation efficiency, operating cash flows, leverage position, valuation metrics, competitive edge, brand equity, the strength of management and good corporate governance practices among others. The scheme may also invest in turn-around companies based on the portfolio manager’s view.
The New Fund Offer (NFO) will be announced subject to Sebi’s approval. The entry load will be nil and the exit load for exits within 90 days from the date of allotment of units will be 0.50%, and for exits beyond 90 days from the date of allotment of units will be nil. The scheme offers growth and dividend options for investment and seeks to collect a minimum target amount of ₹20 crore.
The performance of the scheme will be benchmarked by Nifty 500 TRI. The minimum application amount for the initial purchase is ₹5000 and Re 1 thereafter.