Canara Robeco AMC to launch value fund; all you need to know

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Canara Robeco Asset Management Company on August 10 announced the launch of new fund offer (NFO), Canara Robeco Value Fund – an open-ended equity scheme that would follow a value investment strategy, to invest in businesses that are trading at a price less than their intrinsic values and are expected to realise their true worth in the future. According to Canara Robeco, the new scheme would identify and select undervalued businesses, based on various financial parameters as well as the valuation techniques for arriving at the company’s intrinsic value. Canara Robeco Value Fund would then construct portfolio keeping in mind opportunity size and risk limits defined for the portfolio. The portfolio construction process will be aided by various in-house quant models with an aim to invest in businesses that have potential to do well due to robust fundamentals.

Canara Robeco Value Fund would take significant exposure into equities and aim to generate long-term capital appreciation from a diversified portfolio in the Indian markets with higher focus on undervalued companies.

Speaking on the rationale for launching Canara Robeco Value Fund NFO, Mohit Bhatia, head-sales and marketing, said: “Value investing, is a proven time tested investment strategy that endeavor to create long term wealth by identifying a portfolio of businesses trading below their intrinsic value and investing in these companies / businesses that offer a high margin of safety. The fund will endeavor to benefit from these mispricing opportunities while creating a rewarding equities portfolio with an attractive upside potential.”

“Canara Robeco Value Fund would invest in those undervalued stocks that provide reasonable margin of safety, helping minimize the downside risk.” Mr. Bhatia added.

Nimesh Chandan, Head, Investment, Equities, said: “Most of the time, when I talk to investors about value investing, they still picture buying a company with a low price-to-book or price-to-earnings ratio. Or they look for good dividend yield. While these are short-cuts to assess the relative value of a company, value investing is not about buying the cheapest companies on these parameters. Value investing is a broader philosophy that involves buying company at a price that is lower than its intrinsic value”.

Fund manager

Vishal Mishra, fund manager-equities, would be managing the new scheme Canara Robeco Value Fund. Mishra is currently also the co-fund manager for Canara Robeco Equity Tax Saver Fund, Canara Robeco Infrastructure and Canara Robeco Bluechip Equity Fund. A chartered accountant and a commerce graduate from Mumbai University, Mishra joined Canara Robeco MF in May 2021.

NFO to open on August 13

Canara Robeco Value Fund NFO would open on August 13 and close on August 27, 2021. The new scheme reopens for ongoing investment from September 6, 2021.

Minimum investment limit

The minimum investment amount in the NFO will be Rs 5,000 and multiples of Rs 1 thereafter for lumpsum investors and for monthly SIP Rs 1,000 and multiples of Rs 1.00, thereafter. S&P BSE 500 TRI would be the benchmark for Canara Robeco Value Fund.