WhiteOak Capital Digital Bharat Fund NFO opens today: Should you invest?

Portfolio composition: Primarily equity and equity-related instruments of technology and technology-related companies

Risk level: Very high risk, as indicated by the riskometer

Recommendation: Investors should consult their financial advisers if unsure about the suitability of the product.

Why focus on technology?

Aashish Somaiyaa, CEO of WhiteOak Capital Asset Management Limited, explained the thinking behind launching the Digital Bharat Fund. He pointed out that while investors are keen to invest in growth-oriented mutual funds, much of the focus has been on cyclical themes that have already surged in the past few years.

“Industry data shows strong appetite from investors for investing in growth-oriented themes in mutual funds but most of that is going into cyclical themes; themes that have already run up a lot in the last 2-3 years,” said Somaiyaa. He added that the idea behind launching the Digital Bharat Fund is to provide investors with a counter-cyclical theme that could offer sustainable growth over time. “While a spate of funds being launched were offering manufacturing, energy, defense, infrastructure and related themes, ‘red hot’ on the back of last 2-3 years performance, we created BFSI, Pharma and Special Opportunities funds that were counter-cyclical at those times and the outperformance is there to see vs. the ‘red hot’ themes. On the same lines, we are now launching Digital Bharat,” he said.

The chief investment officer (CIO) of WhiteOak Capital Asset Management Limited, Ramesh Mantri, added that the fund aims to tap into the growing digital transformation in India, which is being driven by advancements in cloud computing, data analytics, and automation.

“Advancements in cloud computing, data analytics, and automation are further fostering innovation in healthcare, education, agriculture, and logistics, contributing to the vision of ‘Digital Bharat’,” Mantri said. He further explained that the fund would focus on long-term wealth generation through investments in both Indian technology companies and businesses driving the digital ecosystem.

Who is it for?

Investors interested in long-term capital appreciation in the technology space might find this new offering an option worth exploring.

Investment structure and allocation

The fund’s portfolio will primarily focus on technology and technology-related companies, with 80% to 100% of the investments allocated to equity and equity-related instruments within the sector. The rest of the portfolio may include:

0% to 20% in equity and equity-related instruments of other companies

0% to 20% in debt securities and money market instruments

0% to 10% in units issued by REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts)

The fund is benchmarked against the BSE Teck TRI, and investors will be able to track the performance accordingly.

Who will manage the fund?

The Digital Bharat Fund will be managed by Ramesh Mantri, along with assistant fund managers Trupti Agarwal and Dheeresh Pathak, who will focus on equity. The debt side will be managed by Piyush Baranwal.

What to know about NFOs

If you’re new to investing in mutual funds, understanding how a new fund offer (NFO) works can be essential. An NFO is essentially the first time a mutual fund is open for subscription by investors. This is the phase where the fund begins raising capital.

Here are some key points to consider:

Subscription period: NFOs typically offer a subscription window of 10–15 days.

Minimum requirement: The minimum investment for NFOs can range from Rs 500 to Rs 5,000, depending on the fund.

Expense: NFOs have an expense ratio, which is the annual cost of managing the fund. Lower expense ratios are considered more attractive as they can improve returns over time.

Risk: Some NFOs might have tax implications

Investment goals: Make sure the fund’s investment goals align with your financial objectives.

Fund manager’s expertise: It’s always a good idea to assess the experience of the fund manager before investing.

First Published: Sep 20 2024 | 8:59 AM IST