Investment Objective*

The primary objective of the Scheme is to provide long-term capital appreciation by investing predominantly in equity and equity-related securities accessed on the basis of advice from a panel of third party investment advisors selected in accordance with the OptiMix Multi Manager Investment Process. However, there can be no assurance that the investment objective of the Scheme will be achieved. *Source: Offer Document

Is this fund for you?

Optimix Multi Manager Equity Fund (OMMEF) is a multi manager equity fund. It is the second offering from Optimix (a brand owned by ING Vysya Mutual Fund), which will pursue the 'manage the manager' approach. The first offering, launched in December 2006, was Optimix RetireInvest Fund Series 1 (ORIFS1). Under this investment style, known as 'manage the manager', Optimix will employ its evaluation parameters to shortlist the 'best of breed' fund houses and PMS (portfolio management service) providers. Before the launch of these two funds, Optimix had launched a bouquet of products in the Fund of Funds (FoF) segment. OMMEF's investment proposition is very similar to that of ORIFS1. The fund, like ORIFS1, will aim at generating capital appreciation by investing in equities, adopting various investment styles (value, growth, blend), from across market segments (large caps, mid caps, small caps). However, they do differ in some aspects. To begin with, OMMEF is an open-ended diversified equity fund while ORIFS1 is a 10-Yr close-ended fund. Second, ORIFS1 is a tax-saving fund, also known as equity-linked saving scheme (ELSS), while OMMEF is a regular equity fund. For Personalfn's view on Optimix's 'manage the manager' process, click here The multi-manager process appears interesting. It will enable investors to diversify their investments across investment styles and market segments, based on the inputs of various fund houses/PMS providers. However, Optimix's exposure to Indian stock markets is relatively limited (it is yet to complete two years in the domestic mutual fund industry), so it's still early to evaluate its performance. Also we would first like to see the short listed fund houses/PMS providers that constitute its 'best of breed' investment advisors before commenting on the same. We recommend that investors evaluate the fund over the long-term (at least 3 years) before taking a view on the 'manage the manager' process. Till then, they should consider investing in existing well-managed equity funds that invest across market segments.

Portfolio Strategy

The fund is mandated to invest between 65%-100% in equities. It also has the option to invest upto 35% of assets in debt instruments. Instruments Allocation Range Equity and equity related instruments 65%-100% Debt and money market instruments 0%-35% The fund will be managed based on the recommendations/advice of the fund houses/PMS providers short listed by the Optimix investment team. OMMEF's allocation to various investment styles (value, growth, blend) and market segments (large caps, mid caps, small caps) will be based on the fund manager's call.

Fund Manager Profile

Mr. Sajjan Raut Desai (PGDM, BE) is the fund manager of OMMEF. He has been associated with OptiMix since October 2005. Before joining Optimix, he was associated with ICICI Bank (Head Financial Advisory) and BNP Paribas (Head Equity Advisory) among other companies.

Outlook

In our view, OMMEF should be well placed to counter volatility with its mandate of investing across market segments and adopting various investment styles. Its proposition of investing upto 35% in debt can also be an ally in containing volatility during a downturn in stock markets. However, the fund's performance will depend heavily on its selection of the best fund houses/PMS providers, which at this stage is not known to the investor.

By Personalfn.com, a financial planning initiative. It can be reached at info@personalfn.com. Personalfn.com also publishes a free-to-download financial planning guide, Money Simplified. To get a copy of the latest issue - How ULIPs fit in - please click here.