The new open-ended equity scheme will invest in a maximum of 25 stocks. But JP Morgan does not have a great track record so far

Moneylife Digital Team

JPMorgan Mutual Fund has filed an offer document with the Securities and Exchange Board of India (SEBI) to launch a new open-ended equity growth scheme to be called JPMorgan India Focus Fund. The scheme will normally hold equities of a maximum of 25 companies and the fund manager will have the flexibility to pick the companies. That is, he could pick a biggie like Infosys today and sell it tomorrow, if he chooses to, or invest in any smaller company as well. So, should you invest in the fund?

There is no reason to believe that the new India Focus Fund will do any better than the other well-performing schemes. Besides, JP Morgan's two existing schemes have done quite badly. JPMorgan India Equity and JPMorgan India Smaller Companies, both launched in 2007, have given returns of 5% and -8% respectively since inception.

The equity portion of the scheme will be managed by Harshad Patwardhan and Amit Gadgil. The debt portion will be managed by Nandkumar Surti and Namdev Chougule. Mr Patwardhan and Mr Gadgil also manage the India Equity and India Smaller Companies funds.

Between 65% and 100% of the assets of the Indian Focus Fund will be invested in equity and equity-related securities with a medium- to high-risk profile.
A maximum of 35% of assets would be put into debt securities, money market instruments and cash and cash equivalents with a low- to medium-risk profile.

The exit load charged will be 1% for redemption within 12 months from the date of allotment. The BSE 100 is the benchmark index for the fund.