Shriram Asset Management Company, part of the Shriram Group, announced the launch of India’s first multi-sector rotational fund, scheduled to open for subscription on November 18, 2024 and close on December 2, 2024.

This open-end equity program introduces a unique investment approach by focusing on rotation between trending sectors, allowing investors to capture sector growth while avoiding prolonged exposure to underperforming areas.

The performance of the fund will be compared to the Nifty 500 index.

The Shriram Multi-Sector Rotation Fund will actively manage a portfolio of stocks by identifying and investing in a minimum of three to six sectors exhibiting positive trends.

The selection process is guided by Shriram AMC’s proprietary Enhanced Quantamental Investing (EQI) framework, which combines quantitative sector analysis with fundamental insights.

This framework examines key factors such as macroeconomic indicators, sentiment and sector prices before finalizing sector selections.

THE fund manager will adjust sector weights and execute sector rotations when trend data indicates changes in performance.

According to Kartik L Jain, Managing Director and CEO, Shriram AMC, the fund addresses a common challenge faced by investors who often miss the optimal time to exit sectors when trends reverse.

“The Shriram Multi-Sector Rotation Fund aims to help investors avoid ‘sector traps’ and benefit from timely rotation across trending sectors,” Jain said.

He added that this strategy is also tax efficient, as capital gains tax is not triggered on transactions managed within the fund.

Deepak Ramaraju, senior fund manager at Shriram AMC, noted that the two-step investment process – starting with sector selection and then stock selection – ensures that the fund remains aligned with its objective.

“Our sector rotation and stock selection approach is designed to generate sustainable alpha over the long term,” he explained.

Investors can opt for Systematic Investment Plans (SIPs), Top-ups and Systematic Transfer Plans (STPs) with a minimum investment of ₹500. SIPs can be set up on a weekly, fortnightly, monthly or quarterly basis.

Once investors have accumulated a corpus, they can initiate a systematic withdrawal plan (SWP) at similar intervals for regular income.

The fund also offers tax efficiency to investors, with capital gains taxed only when they withdraw from the fund. This contrasts with direct investments in sector funds, where frequent rebalancing results in a capital gains tax on each transaction.

The Multi-Sector Rotation Fund structure helps investors capture sector trends without additional tax implications.