Nippon Life India Asset Management, asset manager of Nippon India Mutual Fund, announced the launch of Nippon India Taiwan Equity Fund on November 22, 2021. This fund will be India’s first open-ended equity fund which will be Taiwan-focused. Cathay SITE – One of the largest AMCs of Taiwan with $42.81 Billion of client assets under management will be the investment consultant for this fund.
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The objective of this scheme is to provide long-term capital appreciation to investors by primarily investing in equity and equity-related securities of companies listed on the recognized stock exchanges of Taiwan and the secondary objective is to generate consistent returns by investing in debt and money market securities of India.
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Basic information about the fund:
| Issue Open | 22-Nov-21 |
| Issue Close | 06-Dec-21 |
| Fund Manager | Kinjal Deasai |
| Bench Mark | Taiwan Capitalization Weighted Stock Index (TAIEX) |
| Exit Load | 1% of redeemed or switched out on or before completion of 3 months from the date of allotments of units |
| Minimum Investment amount | Rs. 500 |
| Plans | Growth Plan, Income Distribution cum Capital Withdrawal (IDCW)Plan |
Pros and Risks:
Firstly let’s look at the pros:
- Taiwan is a global play on the Semiconductor & Electronics Industry.
- Taiwan plays a critical role in the entire supply chain.
- Diversification opportunity by getting exposure to Taiwan’s unique tech sector.
- Tech-manufacturing is a large & fast-growing area.
Now, some of the risks involved:
- Geopolitical risk because of the possible conflict with china.
- Currency risk.
- Investor holding units of a segregated portfolio may not able to liquidate their holding till the time recovery of money from the issuer.
Historical performance of Taiwan capitalization weighted stock index:
The data is taken from 01/01/11-22/11/21
Verdict:
This fund offers a good opportunity for investors to diversify geographically and since it is a passively managed fund hence there is no fund manager bias and also TAIEX has performed well in the last 10 years compared to S&P BSE 500 Index. It has generated 12.4% average returns compared to S&P BSE 500 Index returns of 12.3% . Considering all the above factors investors may consider adding this fund to be a part of their international equity allocation.
Disclaimer:
This article should not be construed as investment advice, please consult your Investment Adviser before making any sound investment decision. If you do not have one visit mymoneysage.in now.
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