The entire exposure of this fund will be in the BFSI or Banking and Financial Service sector. The name of the fund is Sundaram BNP Paribas Financial Services Opportunities Fund. In this article, I will attempt to highlight the good and bad of this fund and whether one should invest in BNP Paribas Financial Services Opportunities Fund.
What is the NFO period for Sundaram BNP Paribas Financial Services Opportunities Fund?
The NFO for BNP Paribas Financial Services Opportunities Fund will is presently open and will close on May 14, 2008.
Which benchmark index will Sundaram BNP Paribas Financial Services Opportunities Fund be tracking?
The BNP Paribas Financial Services Opportunities Fund will be tracking the CNX Bank Index
Where will the Sundaram BNP Paribas Financial Services Opportunities Fund invest?
The BNP Paribas Financial Services Opportunities Fund will primarily focus on investing in stocks of PSU banks, private banks like ICICI, HDFC, etc. and other financial services companies which may also include insurance companies, brokerage firms, mutual fund AMC and exchanges.
How will the investment pattern be for Sundaram BNP Paribas Financial Services Opportunities Fund?
65 to 100 percent of the capital allocated will be invested to equity instruments of the BFSI sector. The remaining 35 to 0 percent may be held as cash or can be invested in other sectors, as the need arises.
What investment options are available in Sundaram BNP Paribas Financial Services Opportunities Fund?
Three options are available
• Dividend Payout
• Dividend Reinvestment
• Growth
These options are available to both institutional and retail investors.
Entry Load and Exit Load charges for Sundaram BNP Paribas Financial Services Opportunities Fund ?
Standard Entry load of 2.25 per cent will be applicable on investments of less than Rs 2 crore. No entry load will be charged on investment equal to or more than Rs 2 crore
Related: Sundaram BNP Paribas Entertainment Opportunities Fund Review
Assumptions of the Sundaram BNP Paribas Financial Services Opportunities Fund?
The fund managers give the following criteria “Due to growing aspiration levels among young Indians who constitute 70 per cent of the population and are multiplying their earnings level, BFSI sector is anticipated to grow. There is huge potential in this sector in India as it has a long way to go in comparison to other economies like US, UK,” said Sunil Subramaniam, executive director - sales & marketing, Sundaram BNP Paribas Asset Management Company.
Any tax benefit available in Sundaram BNP Paribas Financial Services Opportunities Fund?
No tax benefit is available in Sundaram BNP Paribas Financial Services Opportunities Fund.
What are the risks of Sundaram BNP Paribas Financial Services Opportunities Fund?
The biggest risk is exposure only to the banking sector. Management can give its own justification and assumptions as stated above, but the biggest problem in the present time is that the banking sector is really struggling hard to fight the global recession. Inflation is at its peak, so are the interest rates are volatile. Coming out with such a bank specific fund is a bit risky.
| Anyways, things work randomly. You can get a bargain in the recent turbulent times and make a fortune if luck is in your favour over the next 5-10 years investment horizon. Investors who are having faith in Sundaram BNP Paribas Financial Services Opportunities Fund Management can bet their money on it and pay the commission to the fund manager. | Table of Contents |
1 comment:
I am still not sure of whether I should invest my money in this fund. Thanks a lot for the opinion anyways.
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