Sahara Super 20 Fund NFO: Review Analysis & Details

The Sahara Mutual Fund house has come out with its New Fund offer or NFO. They have launched a new fund called the Sahara Super 20 Fund. Seems like the Investor sentiment is high, and the mutual fund companies are finding this to be the right time to come out with the NFO for their new funds.
High on the heels of Reliance, which recently concluded the NFO or New Fund Offer for its Reliance Infrastructure Fund: (Review & Analysis of NFO), and then the Franklin Templeton Investments (India), has also come out with its Infrastructure focussed fund called the Franklin Build India Fund FBIF NFO: Review Analysis & Details. Then it was the turn of Religare Business Leaders Fund NFO: Review Analysis & Details and now its Sahara Super 20 Fund. In this article, we will analyse how good is this Sahara Super 20 Fund NFO, whether this Sahara Super 20 Fund offers anything new or unique for the investors and whether the investors should invest in Sahara Super 20 Fund .
Let's begin with some details about Sahara Super 20 Fund .
What are the NFO dates for Sahara Super 20 Fund ?
The NFO for Sahara Super 20 Fund will open on June 25, 2009 and will close on July 23, 2009.

What is so unique about this Sahara Super 20 Fund ?
The scheme document document cites the scheme objective as focussing on investment in companies and stocks which Sahara Fund Management believes are the top 20. What this means is that the Sahara Mutual Fund Manger will invest in stocks and equity related financial instruments of the companies which fall in the top 20 bracket selected from the top 100 companies as per the market capitalization. Now this may give an impression that the companies to be invested in are the top 20 comapnies as per market capitalization. however, as I understand it, it is that the fund manager will take the top 100 companies as per the market capitalization, and from these 100 short listed companies, he will select the 20 which he believes will be potentially attractive. So, it may end up being a mix of large cap and mid cap companies - if the short-listing is limited to top 100 as per the market cap.

Here, the Fund Managers stock pickign skills will be crucial. Otherwise, if you are interested in benefiting from the top rated companies, go for a marge cap fund or a Nifty based ETF (Example)

Asset allocation will be as follows: At least 65% of the total assets will be invested in equity and equity related securities and upto a maximum 35% of the total assets may be invested in debt and money market instruments.
The fund will track Nifty 50 as its benchmark and claims to have major focus on large caps given the fact that they believe the Indian Economy is reviving. However, selecting 20 from top 100 means that they may also have to include some mid caps.

Various Investment Plans are available: Under the scheme one can opt for dividend option, (including dividend re-investment option) or growth option. Minimum application amount is Rs 5,000. Systematic investment plan (SIP) is also available with the scheme.

What is the Load Structure (Entry Load & Exit Load) for Sahara Super 20 Fund ?
Entry Load of 2.25%. Exit load of 1% for investments of greater than or equal to Rs 1 Crore, if redeemed on or before 1 year from the date of allotment. No tax benefit available for investing in Sahara Super 20 Fund.

Sahara Super 20 Fund NFO offer price: Rs. 10 per unit plus applicable load, if any.

Final Thoughts about the Sahara Super 20 Fund?
Nothing so special or unique about the Sahara Super 20 Fund - same asset allocation promise, same long only investment strategy, same load structure as like the other fund. investors who believe in the fund management skills of Sahara and have trust that the fund manager will be able to really select the best performing 20 stocks out of the top 100 stocks are per the market capitalization can invest in this fund