Banking & Financial Services Fund: Mirae Asset Investment Managers India today launched the Mirae Asset Banking and Financial Services Fund. It is an open-ended equity scheme that invests in the banking and financial services sector. The new fund offer (NFO) for this fund will open for subscription on November 25, 2020 and will close on December 4, 2020. The minimum investment in this scheme can be Rs 5,000 and in multiples thereof. The scheme will reopen on 14 December 2020 for continued sales and repurchases.
Key features of the fund
- The fund will invest in listed banks, public sector banks, private banks, foreign banks and regional rural banks in India.
- The fund can also invest in asset management companies (AMCs), life insurance and non-life insurance companies, broking companies, rating agencies, exchanges, wealth management companies, non-banking financial companies (NBFCs) microfinance companies and financial technology companies.
- The goal of this fund is to identify companies with high growth rates, whose returns ratio is high, as well as those that are sustainable.
- The fund aims to create a portfolio of companies with strong growth.
- This fund will have the flexibility to invest in companies with all types of market cap. Financial companies account for about 30 percent of the market capitalization of the top 250 companies.
Why this fund is better
Despite a high savings rate of 19 per cent in India (it is only 9 per cent on average in the world), it is considered to be an underbanked country with access to banking services to fewer people. Which has a lot of scope for expansion. There is tremendous growth potential in India in all categories such as financial sector, AMC, life insurance, capital markets. In the case of capital, the situation of Indian banks has strengthened in the last few years. His Tier 1 capital stood at 13 per cent in FY 2020, while the regulatory requirement is only 9.25 per cent.
(Source: Bloomberg data for October 2020)
Why BFSI has huge growth potential
Swaroop Mohanty Naka, CEO of Mirae Asset Investment Managers India Private Limited, says that the size of banking and financial sector is not only very large, but it is also the most diversified sector of the Indian economy. In the last 2-3 decades, the sector has expanded into related businesses like NBFC, Insurance, AMC. The government hopes that the Indian economy will grow to $ 5 trillion in the next few years. With this, BFSI, which is the backbone of the economy, can be the major engine in this growth.
CIO Nilesh Surana of Mirae Asset Investment Managers India Private Limited says that we remain positive about the banking and financial services sector. The shift to an organized economy and long-term adoption of financial assets will open up good avenues for growth.