To generate long term capital appreciation by investing in Equity & Equity related instruments through a diversified basket with an aim to minimize the portfolio volatility. However, there can be no assurance or guarantee that the investment objective of the Scheme will be achieved.
The Scheme is an open ended equity scheme predominantly investing in Equity & Equity related instruments through a diversified basket with an aim to reduce the portfolio volatility. As a part of low variance strategy, the scheme will invest in Equity & Equity related instruments of companies forming part of Nifty 50 Index. Portfolio would be constructed with an endeavour to maintain the overall variance of the scheme lower than that of the benchmark. Further, the Scheme shall follow an active investment strategy. Variance can be defined as a measure of dispersion i.e., how the stock returns varies from its average returns over a period of time. A stock with low price volatility (or movement) and consistent returns over a period of time are construed to be a stock having low variance. The AMC may exclude certain companies from investable universe based on various factors, including but not limited to corporate governance standards, liquidity constrains, volatility, valuations, financial performance, higher default risk, etc. The parameters used for selecting the stocks will be a combination of factors such as volatility, downside risk, maximum drawdown and upside potential. Minimum Variance Strategy will aim to maintain the risk (volatility of returns) of core portfolio lower than the benchmark. We measure risk based on the historical volatility of the returns. Portfolio of the Scheme will be reviewed on a periodic basis. The Scheme may also use various derivative and hedging products from time to time for hedging and rebalancing purposes, in the manner permitted by SEBI, including writing of covered call option. The Scheme may use other derivative instruments like Interest Rate Swaps, Interest Rate Futures, Forward Rate Agreements, Stock / Index Futures or Options or other instruments for the purpose of hedging, portfolio balancing and other purposes, as permitted under the Regulations. Hedging using Interest Rate Futures could be perfect or imperfect, subject to applicable regulations. Usage of derivatives may expose the Scheme to certain risks inherent to such derivatives. For complete details on erivative Strategies` kindly refer to SAI. The Scheme may also invest up to 20% in overseas markets in equity & equity related instruments including Global Depository Receipts (GDRs), ADRs, foreign securities, bonds and mutual funds and such other instruments as may be allowed under the Regulations from time to time. Further, the Scheme may invest in other schemes managed by the AMC or in the schemes of any other Mutual Funds in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for such investments. The Scheme may also invest in Debt and Money Market Securities/Instruments (Money Market securities include cash and cash equivalents). The Scheme may also take exposure to Units of debt Mutual Fund schemes. The Scheme aims to identify debt/ money market securities which offer optimal level of yields/returns, considering risk-reward ratio. With the aim of controlling risks rigorous in depth credit evaluation of the securities proposed to be invested in will be carried out by the Risk Management Team of the AMC. The credit evaluation includes a study of the operating environment of the issuer, the short as well as long-term financial health of the issuer. Rated debt instruments in which the Scheme invests will be of investment grade as rated by a credit rating agency. The AMC may consider the ratings of such Rating Agencies as approved by SEBI to carry out the functioning of rating agencies. The Scheme may invest in securitised debt. The scheme may also undertake repo transactions in corporate debt securities in accordance with the directions issued by RBI and SEBI from time to time. Such investment shall be made subject to the guidelines which may be prescribed. For the present, the Scheme does not intend to enter into underwriting obligations. However, if the Scheme does enter into an underwriting agreement, it would do so after complying with the Regulations and with the prior approval of the Board of the AMC/Trustee.
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