Nippon India Mutual Fund, formerly Reliance Mutual Fund, is an asset management company (AMC) that was formed as result of Japan’s Nippon Life Insurance Company buying Reliance’s stake. The fund house offers a host of products tailored for investors to meet their varied investment goals.
The company offers a range of products under various categories such as equity funds, debt funds, liquid funds, gold funds, ETF funds, retirement funds, etc. The Nippon India Banking Fund - Growth Plan - Growth Option is a scheme under the equity fund type and offers growth to its investors. The growth option of the scheme allows investors to grow their investments over a period of time. While it does not provide any short-term returns, it achieves wealth creation over a long period of time.
Investment Objective of Nippon India Banking Fund - Growth Plan - Growth Option
The basic objective of the scheme is to create returns from the scheme on a regular basis by investing in equity and equity-related instruments of companies in the banking sector or engaged in activities related to the banking sector.
Key Features of Nippon India Banking Fund - Growth Plan - Growth Option
The key features of the equity fund scheme - Nippon India Banking Fund is:
|Type of fund||Open-ended equity scheme that makes investments in the banking sector|
|Options under each plan||
|Systematic Investment Plan||Available|
|Systematic Transfer Plan||Available|
|Systematic Withdrawal Plan||Available|
Investment Amount for Nippon India Banking Fund - Growth Plan - Growth Option
The minimum investment amounts are mentioned by the company as given below:
|Minimum application amount||Rs.5,000|
|Minimum additional investment||Rs.1,000|
|Minimum installment for Systematic Investment Plan (SIP)||Rs.100|
|Exit Load||1% of NAV charged in case units are switched out or redeemed before completion of 1 year from the date of allotment of units|
The minimum balance that is required to be maintained is Re.1.
Asset Allocation for Nippon India Banking Fund - Growth Plan - Growth Option
|Instruments||Allocations (Percentage of total assets)||Risk Profile|
|Debt and money-market instruments||0% - 20%||Low to medium|
|Equity and equity-related instruments||80% - 100%||Medium to high|
Who can invest in Nippon India Banking Fund - Growth Plan - Growth Option
The entities given below can subscribe to this particular scheme:
- Adult individuals resident in India - single holding or joint holding (maximum 3 adults in joint holding)
- Parents or legal guardians in place of minors
- Non-resident Indians and individuals of Indian origin residing in a foreign country
- Hindu Undivided Family
- Companies, trusts (religious trusts, charitable trusts, and private trusts), societies, and partnership firms
- Approved international multilateral agencies
- Financial and investment institutions and banks
- Foreign institutional investors, Qualified Foreign Investor, and Foreign Portfolio Investor
- Special Purpose Vehicles (SPVs)
- Army, Air Force, Navy, Para-military funds
- Research organisations such as scientific research organisations or industrial research organisations
- Body of persons permitted by Nippon India Capital
- AMC, sponsor, or AMC
- Other individuals, associations, or institutions as decided by the AMC
NAV Disclosure and Benchmark for Nippon India Banking Fund - Growth Plan - Growth Option
NAV: The NAV of the scheme is calculated by dividing the market value of the company’s assets by the number of units remaining at the end of the business day. The company’s assets include the investments of the scheme, the accumulated income, the receivables, and other assets. But the expenses, liabilities, and payables need to be deducted from the income mentioned above. The NAV is disclosed on every business day at 9 pm on the official website of AMF. The NAV is also published in a minimum of 2 popular newspapers every day.
Liquidity: Units can be sold, redeemed, switched-in or switched-out on any working day. Once the mutual fund receives a valid redemption request, it will send out the proceeds of the redemption within 10 working days. The mutual fund will be required to pay a penal interest in case it does not dispatch the proceeds within 10 working days.
Benchmark: The benchmark of this particular scheme has been set as the Nifty Bank.
Fund Managers of Nippon India Banking Fund - Growth Plan - Growth Option
The fund managers of the scheme are Sanjay Parekh and Jahnvee Shah.
Sanjay Parekh is the Senior Fund Manager of Nippon India Nippon Life AMC and has been managing Nippon India Banking Fund - Growth Plan - Growth Option since September 2017. Parekh has been in the capital market for more than 23 years and has vast knowledge about the industry.
Jahnvee Shah is the Fund Manager for overseas investments in Nippon India Nippon Life AMC and has been managing Nippon India Banking Fund - Growth Plan - Growth Option since April 2011. Shah joined the company as a Research Analyst in May 2006.
Investment Restrictions of Nippon India Banking Fund - Growth Plan - Growth Option
Certain investment restrictions have been set for the scheme as follows:
- The limit mentioned for investments in debt instruments like money market instruments and non-money market instruments is 10% of NAV. The limit can be extended to 12% only if the approval has been taken from the boards - Board of directors of the AMC and Board of Trustees.
- The exposure limit of debt schemes of group mutual funds is 20% of the net assets under the scheme. With the approval of the Board of Trustees, the limit can be extended to 25%.
- The scheme does not allow unitholders to avail term loans from the scheme’s corpus.
- Investors can switch between schemes as long as the switch is done at the market price prevailing at the time of the switch and the objective of the new scheme matches the old scheme to some extent.
- The buying and selling of securities under a scheme are based on the deliveries and the short selling of securities is required to be done according to the framework provided by the Board.
- Investments can be made in another scheme or another mutual fund without being levied with charges, provided the average investment of all schemes under Nippon India or all schemes under a different AMC does not exceed 5% of NAV of the scheme.
- The fund can invest in scheduled commercial banks for short periods of time.
- The securities that are purchased for the sake of long-term investments will be purchased under the name of the fund on account of the scheme.
- In case the fund wants to achieve liquidity in order to repurchase, redeem, pay interest, or pay dividends, it is allowed to borrow up to 20% of the NAV of the scheme. The amount can be borrowed only from authorised institutions and the loan period cannot go beyond 6 months.
- For unlisted equity and equity-related securities, the maximum investment limit is 5%.
- Investments cannot be made by the scheme in securities issued through private placement, listed securities that has net assets more than 25%, and unlisted securities.
- The scheme corpus cannot exceed 10% of the company’s paid-up capital
- The scheme cannot invest in Fund of Funds schemes.
- The illiquid securities under the scheme cannot exceed 15% of the total assets under the scheme.
- The limit for investments in equity and equity-related instruments is 10%. The limit is only for index funds or sector-specific funds.
- The scheme is permitted to make investments in overseas instruments as per the regulations put down from time to time.
- The total exposure limit of the scheme in a particular sector cannot exceed 25% of the net assets.
- The scheme is required to function in accordance with the regulations of SEBI.
Dividend Policy of Nippon India Banking Fund - Growth Plan - Growth Option
The trustees of the mutual fund, in their meeting, will decide the dividend rate that is to be provided to the unitholders. The dividend rate will be decided based on the distributable surplus available under the scheme. Within a day after the trustees decide on the dividend rate along with the record date, both will be announced publicly. The announcement will be published in at least one widely subscribed newspaper. The dividend will be dispatched within 30 days from the day of declaration of the dividend rate. Failure to dispatch the dividend within the stipulated time will attract an interest of 15% p.a. of the dividend. The net assets of the scheme will be reduced by the product of the number of units for which dividend is declared and the gross amount of the dividend declared per unit.
Other facilities under Nippon India Banking Fund - Growth Plan - Growth Option
- Online transaction: Investors can subscribe, switch, redeem, or avail other facilities on the official website of the AMC. The website is considered an official point of acceptance.
- Any time money card: The AMC has created a co-branded debit card called Nippon India Any Time Money Card which allows a unitholder to withdraw cash instantly from any ATM or from a Point of Sale.
- Interbank mobile payment: Unitholders can use the mobile platform to carry out transactions by registering themselves for the facility in their respective banks.
- Invest Easy facility for individuals: Individuals who hold the folio as a single individual or a survivor can use the Invest easy facility to make transactions through the phone, through SMSs, or through the official website of the AMC.
Why you should invest in Nippon India Banking Fund - Growth Plan - Growth Option
Nippon India Mutual Fund offers many well-designed schemes that that helps the investors grow their investment corpus. The company, on its official website, also provides various tools that help investors calculate the SIP, analyse risks, or plan one’s investment. The tools will help individuals assess the goals and risks before choosing a suitable plan. In case of queries or any kind of help, the investors can always reach out to the customer care executive to resolve their queries.
GST rate of 18% applicable for all financial services effective July 1, 2017.