Union Focused Fund is a type of open-ended equity scheme where you can invest in a maximum number of 30 stocks across various market caps. It is a multi-cap scheme with the objective to grow capital by investing in selected equities and equity-linked securities.
This scheme works by seeking to generate long-term capital appreciation utilizing equity-related investments. Since this scheme has a higher level of concentration, it may also result in an increase in volatility. The particulars of the Union Focused Fund have been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations 1996.
This scheme has two plans spanning over a common portfolio — direct plan and regular plan.
Under a direct plan, you have the option to purchase or subscribe units in the scheme directly through the Union Mutual Fund. This plan, however, won’t work out for those who are looking to invest through a distributor. The subscribers who are opting for a direct plan will have to mark the plan against the scheme name, under the application form titled ‘Union Focused Fund - Direct Plan’.
Regular plan, on the other hand, is given out to investors who subscribe or buy units through a distributor of the scheme.
The difference between these two plans is that the former — the direct plan comes with a lower expense ratio when compared to the latter, as it saves much on commission, distribution expenses, and more. A direct plan is free of any distribution charges and commissions, and thus it comes with a separate NAV.
The choice between the two completely depends on your familiarity with the stock market, and if you are willing to take the fund-related decisions by yourself.
“With the launch of Union Focused Fund, Union Mutual Fund is taking an important step in enhancing its product basket to provide differentiated investment solutions to its investors. The new product will help us expand our equity bouquet. The Fund will be managed by Mr. Vinay Paharia, who has a successful long term track record of managing funds across multiple strategies. The portfolio will be centered around maximum 30 stocks with a flexibility to invest across market capitalization," G Pradeepkumar, the Chief Executive Officer of Union AMC.
He went on to add that the last 12 months have been good or Union Mutual Fund, since this “robust new investment process” is based on much fundamental research and a fair value approach. The results too, he said, are visible over this period in most of the funds.
Union Focused Fund offers the following options under a direct or regular plan.
Growth option: It is suitable for those who are only investing with the need to increase their capital, and not look out for dividends.
Dividend option: This option works best for those individuals who are seeking income through dividends from time to time. The dividend, however, will be dependent on the availability of the surplus which is to be distributed.
If you fail to select a particular option at the time of investing, then the default plan, which is the Growth option is selected. Another thing to be noted here is that if the dividend which is to be payable is equal to or less than Rs 500, then it will automatically get reinvested in the selected option of the scheme.
The minimum application amount of Union Focused Fund falls at Rs 5,000 and multiples of Re 1. However, for Systematic Investment Plans (SIPs), the minimum application amount falls at Rs 2000 and in multiples of Re 1 for monthly frequency and Rs 5,000 in multiples of Re 1 for quarterly frequency. For subsequent investment under an existing folio, the minimum additional application amount is Rs 1,000 and in multiples of Re 1. The same goes for the minimum redemption amount.
People who buy these units can easily switch between one scheme to another — switch between plans and scheme options as the need calls. However, switching schemes if subject to the completion of the applicable lock-in period.
When it comes to the transfer of units, then the units that are held in physical form — through account statements — cannot be transferred. However, the units under the scheme that you hold in a dematerialized form can easily be transferred freely. It is subject to the lock-in period as well.
In order to make the best out of your investment and to minimize the associated risks, the scheme comes with certain facilities that add several features and flexibility to it. Here are the special products and facilities available under the scheme:
Systematic Investment Plan
Systematic Transfer Plan*
Systematic Withdrawal Plan*
Facility to purchase/ redeem units of the Scheme through Stock Exchange Mechanism Transactions by Fax
Transactions through Electronic Mode
Registration of Multiple Bank Accounts in respect of an Investor Folio*
Facility to transact through email
* Facility will not be available under demat mode of holding units
THe Union Focused Fund is for anyone who seeks long-term capital appreciation through investment in equity and equity-related securities including equity derivatives upto a maximum of 30 stocks across market capitalization.
However, if you are not sure about their investment goals and need, then it is best to consult a financial advisor before you take any decision around it.
The asset allocation of the fund will take place in such a way that it can be steadily monitored, and that investments are made in accordance with the objectives of the scheme, and within the internal regulatory investment restrictions that are generally prescribed.
The scheme is covered by a detailed process that identifies, measures, monitors, and then manages the onsetting portfolio risk. The aim of risk management here is to come up with a structured mechanism towards risk-management, which then maximizes the opportunities and potential of the scheme, thus minimizing the adverse effects that come with risk.