Are you dynamic? Or are you safe? Are you one of those aggressive investors who like to try out the fast moving stocks even if it means taking a lot of risk? Or would you rather be the conventional investor picking only select stocks that display a predictable behavior? Or maybe a bit of both – playing by the ear – one who takes measured, calculated risks? If so, then the Small-and-Medium-Indian-Leading-Equities (SMILE) that was launched in February 2005 by Sundaram BNP Paribas Mutual Fund could be tailor-made just for you.
Sadly at that point of time, stock prices as well the Sensex & Nifty were high and there was plenty of scepticism in the markets about the impending bear phase. This is October 2009 and now that we have left the bears behind us, (as we can safely say) and with the Sensex crossing the 17,000 Level and also from the macro economic point of view, the general faith in the economy and the markets has been substantially restored. The pumping in of funds by the FIIs and a good & stable functional government have worked towards bringing in adequate liquidity in the financial system which in turn has enhanced the level of optimism in the Indian market as also in all the Global markets which bottomed out together around February-March, this year.
It has been a noticeable trend in the recent past that Mid Cap and Small Cap stocks tend to outperform the Large Caps in the longer term. It is because of this reason that SMILE intends to have Mid and Small Caps as its strategic focus with a cushion of 35% on Large Cap stocks.
Key Features of the Scheme
- Aggressively managed multipurpose fund
- Capital appreciation by active, sector, trading & cash calls
- Focus on Mid Cap & Small Cap with a cushion of 35% in large cap stocks
- CNX Mid Cap Index Bench mark adopted for comparing with standard returns
- Capital curve bias towards Mid Cap & Small Cap (together minimum 65%) and Large Cap stocks (maximum 35%)
While the aggressive approach of the fund involves higher risk, its primary focus on dynamic stocks would also lead to returns that far exceed the standard benchmark.
The important feature of this portfolio is that its investments in Large Cap stocks is flexible up to 35%, acting as a safeguard against the risk due to volatile market conditions.
The SMILE portfolio is an opportunity to investors to invest in Mid Cap & Small Cap stocks while at the same time providing a stable Large Cap exposure of 35%. So go ahead, seize your chance to SMILE!