A new equity or stock based mutual fund is going to enter the Indian markets. The fund belongs to Taurus mutual fund house and is called the Taurus Banking & Financial Services Fund. As the name suggests, this fund will keep its focus in the banking space by investing the money collected from investors in the stocks of companies operating in the BFSI sector i.e. Banking & Financial Services. That would means stocks of banks, NBFC, financial services companies will be in the portfolio.
In this article, we will analyze how good is this Taurus Banking & Financial Services Fund NFO, whether this Taurus Banking & Financial Services Fund offers anything new or unique for the investors and whether the investors should invest in Taurus Banking & Financial Services Fund.
Taurus Banking & Financial Services Fund NFO: Review Analysis & Details
Let's begin with some basic details about Taurus Banking & Financial Services Fund.What are the NFO dates for Taurus Banking & Financial Services Fund?
Image sourced as screenshot from official Taurus mutual fund site
The NFO period for Taurus Banking & Financial Services Fund is from May 2, 2012 to May 16, 2012. After the NFO period, the regular buying, selling and redemption of fund units will start at a date not yet known.
What is so unique about this Taurus Banking & Financial Services Fund?
If this has to be answered in simple terms, this fund does offer something unique in terms of being a mutual fund dedicated to BFSI. A mutual fund which will try to focus on the BFSI sector and invest the money collected from investors in the bank and finance company stocks.
In the past as well, there have been many banking mutual funds :
- Lotus India Banking Fund
- ICICI Prudential Banking & Financial Services Fund
- Sundaram BNP Paribas Financial Services Opportunities Fund
Even few ETF's like:
- Reliance Banking Exchange Traded Fund RBETF
- Bank BeES an Exchange Traded Fund (ETF)
and many more.
So, there is lot in the market in the BFSI sector for investing through the various available Bank focussed mutual funds and ETF's.
What are the other competitor products available in comparison to Taurus Banking & Financial Services Fund?
There are many mutual funds available as listed above. Add it them the list of ETF (Exchange Traded Funds) and Index Funds, the no. will shoot even higher. See List of All Mutual Fund and NFO Articles here
However, there can be more similar products offerings from other fund houses as that list is not complete.
What are the risks of investing and trading Taurus Banking & Financial Services Fund?
There are alwasys risks involved in any kind of investment.
The Taurus Mutual Fund claims that India is going to grow and so will the BFSI sector grow and the story goes on & on. Problems with sector specific funds is that they take the hit when the entire sector goes down.
Another problem with Banking and Fincial services sector is that it is highly sensitive to the interest rate fluctuations as well as global developments. Since the interest rates are directly or indirectly controlled by the government, just a small change leads to big moves in the bank and financial stocks in either direction.
Also, there is a big dependency on global developments. Something happens in a European economy, that has a direct or indirect impact on banks across the globe. So by investing in any such sector specific fund, the investor has to take the sector specific risk.
These inherent risks are to be taken by the investor.
Final Thoughts about Taurus Banking & Financial Services Fund?
In summary - Another mutual fund focussed on Banking & Financial Services sector. Offers nothing different or unique except for focus on BFSI which is already offered by other fund available in the market.
Investors can also look for ETF's like the Bank BeES ETF by Benchmark or the Reliance Banking Exchange Traded Fund RBETF.
See List of All Mutual Fund and NFO Articles here
During NFO period each unit cost Rs. 10 per unit
Minimum investment Rs 5000 and in multiples of Re 1 afterwards.
Tax benefit will NOT be available in Taurus Banking & Financial Services Fund.
There will be 2 plans for investors to choose from:
Multiple options available for investments:
Growth Option
Dividend Option - Payout, Reinvestment, Sweep facilities
Taurus Banking & Financial Services Fund Entry Load: NIL
Taurus Banking & Financial Services Fund Exit Load: 1% for exit (repurchase/switch-out/SWP) on or before 1 year from the date of allotment.
NIL beyond 1 year.
Asse Allocation:
Equities and equity related instruments of Banking & Financial Services sector - 80% to 100%
Debt and Money market instruments - 0% to 20%
SIP or systematic investment plan? Yes Available.
Minimum application amount 1000 Rs. for SIP, SWP, STP
The benchmark for Taurus Banking & Financial Services Fund will be BSE Bankex Index
Mr. Sadanand Shetty will be the fund manager for Taurus Banking & Financial Services Fund.
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