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IDFC Mutual Fund has announced the launch of a 21 month closed ended equity scheme which will look to invest in companies with high dividends and little or no debt.
‘IDFC Equity Opportunity Series 3 is open from February 10 to February 24, 2014, according to a statement from the fund house.
Kalpen Parekh, Chief Executive Officer, IDFC Asset Management Company said that the fund looks to take a contrarian view on the equity market, in light of attractive valuations.
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“This is the third investment idea in our series of portfolios offered in this year through Equity Opportunities Funds. The overall consolidating environment is giving us an opportunity to build equity portfolios counter cyclically. Investors are under weight equity and it is better to increase allocations when valuations are favourable,” he said in a press statement.
Ankur Arora, Associate Director at IDFC AMC said the Return On Equity(RoE) levels means that it may make more sense for companies to return cash to shareholders than reinvest in the business.
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“As the current level of ROE does not incentivize fresh capex, the surplus generated in businesses will be paid out to shareholders by way of dividends. Through this fund we aim to capture opportunities available in such companies,” he said in the same statement.
Ankur Arora is also the fund manager for the fund. The fund would measure its performance against the S&P BSE 500 index.
