Baroda BNP Paribas MF launches new value fund

Hyderabad: Baroda BNP Paribas Mutual Fund announced the launch of Baroda BNP Paribas Value Fund, an open-ended equity scheme that follows a value investment strategy. The fund, which aims at creating wealth for the long-term investors, will be managed by Shiv Chanani, a senior fund manager, who comes with over 21 years of experience. Its performance will be benchmarked against Nifty 500 Index. The NFO which opened on May 17, 2023, will close on May 31, 2023.

The fund aims to achieve long term capital growth by investing in a diversified portfolio of companies selected using principles of value investing. The fund would identify mispriced opportunities between the intrinsic value and the prevailing market price. To identify these opportunities, the fund would look for stocks which trade at a discount to the overall market, their own historical average valuations or relative to their fundamental valuations.

The fund believes that value opportunities are available in the equity markets at multiple levels: a) broad market often over-reacts to crises as seen in GFC in 2008 or Covid meltdown in 2020.This can provide attractive opportunities across the market; b) Sector specific challenges like short term supply chain disruptions, regulatory changes, etc. provide value opportunities at the sector level; and c) finally, company specific opportunities unearthed through our bottom up research.

The scheme will invest in equity and equity related instruments (65 per cent – 100 per cent), debt & money market instruments (0 per cent – 35 per cent), units issued by REITs & INvITs (0 per cent – 10 per cent) and units of mutual fund schemes (0- 10 per cent)

“At Baroda BNP Paribas AMC, we have a strong investment culture backed by a disciplined framework, seasoned team, and robust processes. In our new fund, Baroda BNP Paribas Value Fund we aim to identify investment opportunities where stocks are available at a discount to their intrinsic value. These opportunities can be across stocks, sectors, and market caps. To manage risk, we have a robust margin of safety framework - margin of safety in balance sheet, in earnings, and in valuation represent our ‘3 S Framework,” said Suresh Soni, CEO, Baroda BNP Paribas Mutual Fund.

The scheme is suitable for patient long term investors who are looking to create long-term wealth by invest in value stocks with adequate margin of safety and looking for diversification from growth-oriented portfolios. The fund aims to benefit from the potential earnings growth as well as the valuation re-rating.