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Edelweiss Mutual Fund Launches ‘Edelweiss Business Cycle Fund’ to Capture Market Trends

Edelweiss Mutual Fund Launches ‘Edelweiss Business Cycle Fund’


Edelweiss Mutual Fund Launches ‘Edelweiss Business Cycle Fund’ to Capture Market Trends

Edelweiss Asset Management Limited (EAMC/EMF), one of India’s fastest-growing asset management companies, has announced the launch of the Edelweiss Business Cycle Fund. This innovative open-ended equity scheme, open for subscription from July 9, 2024, to July 23, 2024, is designed to leverage business cycles to capture market opportunities effectively.

A New Investment Opportunity

The Edelweiss Business Cycle Fund introduces a sophisticated investment strategy that focuses on the dynamic nature of business cycles. The fund adopts a factor-based approach, which aims to create three distinct baskets of stocks representing quality, growth, and value. This diversified strategy helps minimize the cyclicality risk associated with any single factor.

By selecting the highest momentum stocks within each basket, the fund builds a robust portfolio of 50-60 stocks. This approach ensures a dynamic rotation between sectors over different time periods, seamlessly combining momentum with fundamentals to optimize entry and exit points. The result is a strategy that aims to generate better alpha for investors.

Addressing Market Timing Challenges

Ms. Radhika Gupta, Managing Director & CEO of Edelweiss Mutual Fund, highlighted the innovative nature of the fund. “The Edelweiss Business Cycle Fund provides investors with a convenient and unique solution by implementing dynamic sector rotations. This strategy effectively addresses the common challenge of timing sector entries and exits, which investors often struggle with. Momentum has been the best-performing factor in India for many years, and when combined with other fundamental factors, it proves highly effective in generating long-term alpha. Investing across various sectors and market caps, this fund offers a robust solution for core allocation with a long-term focus.”

Fund Management Expertise

The fund will be managed by Mr. Bharat Lahoti and Mr. Bhavesh Jain, Co-Heads of Factor Investing at Edelweiss Mutual Fund. Their expertise in factor-based investing is expected to drive the fund’s performance, leveraging their deep understanding of market dynamics and stock selection.

Mr. Lahoti and Mr. Jain bring a wealth of experience in managing investments based on factor-based strategies. Their approach focuses on identifying stocks with strong price momentum while maintaining a keen eye on fundamentals. This dual focus ensures that the fund remains agile and responsive to changing market conditions, capitalizing on emerging opportunities.

Investment Strategy and Benefits

The Edelweiss Business Cycle Fund’s strategy involves periodic rotations between sectors, investing in those that are currently performing well. This proactive approach allows the fund to capture trends and shifts in the business cycle, providing investors with exposure to high-potential sectors.

The fund adopts a benchmark-agnostic approach, meaning it does not strictly adhere to any specific market index. This flexibility allows for investments across various sectors, with a primary focus on large and mid-cap stocks. By identifying growth, value, and quality stocks exhibiting price momentum, the fund aims to build a diversified and resilient portfolio.

Why Invest in the Edelweiss Business Cycle Fund?

  1. Dynamic Sector Rotation: The fund’s ability to dynamically rotate between sectors ensures that it remains aligned with the most promising areas of the market.
  2. Factor-Based Investing: By focusing on quality, growth, and value stocks, the fund minimizes the risk associated with any single investment factor.
  3. Momentum with Fundamentals: Combining momentum with strong fundamentals helps optimize stock selection and enhance potential returns.
  4. Experienced Management: Managed by experts in factor-based investing, the fund benefits from their deep market insights and strategic approach.
  5. Long-Term Focus: The fund’s robust investment strategy is designed for core allocation, making it suitable for investors with a long-term investment horizon.

Subscription Details

The New Fund Offer (NFO) for the Edelweiss Business Cycle Fund is open for subscription from July 9, 2024, to July 23, 2024. This window provides investors with the opportunity to participate in a fund designed to capture market trends through an innovative, factor-based investment approach.

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