SBI Mutual Fund – Equity Savings Fund (NFO: May 11 – May 25) Details

SBI Mutual Fund has launched SBI Equity Savings Fund. This is an open ended equity fund. Fund will invest major portion (65% – 90%) in equity & equity related instruments and Cash-future arbitrage. Balance portion will be invested in debt & money market instruments (10% – 35%). Fund will have three parts of the investment strategy. These are:

  • Cash and Futures equity arbitrage: Endeavours is to generate income by exploitation of arbitrage opportunities in equities market. Exposure in stocks in the cash market will be offset by taking equivalent exposure in derivatives market.  Thus, the entire position will be used to lock risk free returns. Range of this investment strategy will be between 15% – 70%.
  • Net long equity: Scheme will take limited long only exposures to equity stocks in order to generate market related returns.  The Scheme shall invest into a well-diversified portfolio of equity and equity related securities across market capitalisation and sectors to participate in the all-round growth of the Indian economy. Range of this investment strategy will be between 20% – 50%.
  • Debt and Money Market Instruments: This portion of the scheme assets is discretionary to provide liquidity into the scheme, management of derivative margins and accrual of regular income. Range of this investment strategy will be between 10% – 35%.

As per the current tax regulations, by managing the scheme as per the above investment strategy will attract equity taxation, which makes it an attractive investment option for investors.

The details of this NFO are given below:

NFO Opens on:                 May 11, 2015

NFO Closes on:                 May 25, 2015

Allotment date:                May 27, 2015

Scheme reopens on:      June 03, 2015

Type of scheme: An open ended Equity Scheme

Investment Objective of the Scheme: The investment objective of the scheme is to generate income by investing in arbitrage opportunities in the cash and derivatives segment of the equity market, and capital appreciation through a moderate exposure in equity. However there is no guarantee or assurance that the investment objective of the scheme will be achieved.

Asset Allocation

The funds collected under the scheme shall generally be invested consistent with the objective of the scheme in the following manner:



Indicative allocations

(% of total assets)Risk ProfileMinimumMaximumHigh/Medium/LowEquity and Equity related Instruments including derivatives


Out of which:


–  Cash-future arbitrage: 15%-70%;

–  Net long equity exposure: 20%-50%6590Medium to HighDebt* and Money Market Instruments (including margin for derivatives)1035Low to Medium

(i)   The cumulative gross exposure through Equity and equity related instruments including derivative position, debt, Money Market Instruments /Units of debt & liquid mutual funds will not exceed 100% of the net assets of the scheme.

(ii) *Exposure to domestic securitized debt may be to the extent of 20% of the net assets.

(iii)             The Scheme shall not invest in ADR/ GDR/ Foreign Securities / foreign securitized debt.

(iv)             The Scheme shall invest in repo in corporate debt.

(v) The Scheme shall not engage in Stock lending.

(vi)             The Scheme shall not engage in short selling

Benchmark: 30% in CNX Nifty & 70% of Crisil Liquid fund Index.

Minimum Application Amount in (Rs.): Rs. 5,000/- and in multiples of Re. 1/- thereafter

From Admin

We do not recommend to invest in NFO as there are many existing tested schemes of many AMC’s including SBI Mutual fund. Let this fund to perform and prove its importance. For the time being, one can look at our recommended mutual funds at Best Indian Mutual Funds for 2015


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