Our primary objective is that a product should solve an investors problem

Canara Robeco is a well established name in the Indian mutual fund industry. For the benefit of new investors as well as new distributors, please give us a brief background about your fund house. Why should distributors consider Canara Robeco when recommending funds to their investors?

Canara Robeco has a very strong pedigree and backed by Canara bank with more than 116 years of banking experience in India and Orix Corporation (formerly known as Robeco founded in 1929 and with over 94 years of Investment experience). This brings together Canara bank extensive experience in Indian market along with Robeco group global asset management experience.

We have over Rs 70,000 crores of assets under management and are now among the Top 15 fund houses in the country on the basis of assets under Management figure as on 30^th June 2023 published by AMFI

Not only we have wide range of Products across equity, hybrid and Fixed Income but few funds with vintage of more than 10 year, 20 years and 30 years as well with good track record. We have endeavour to follow robust Investment and Risk Management process aiming at creating superior customer experience.

What is your thought process when you are planning a new product launch?

We have our own check-list before we launch any new products. Whenever we a launching a new product, we ask ourself few questions

What investor problem this product solves?

Is it a scalable idea?

Do we have expertise in managing that asset class? and many more questions.

Our primary objective is that it should solve an investor’s problems. We do not launch a product just for the sake of having another product. Products should be scalable ideas and should solve investor’s problems.

You have recently launched Canara Robeco Multicap Fund. The NFO is open for subscription till 21st July. Why are you launching a Multicap fund?

If you look at Canara Robeco, we have experience in managing large cap, midcap and small cap segments. We have funds in all these three market cap segments. Also, we have funds with diversified strategies, where we are building up portfolios with stocks across market caps. We think that now its a good time to have a product in the Multicap category. We think of Multicap as an investment solution and not just only as another mutual fund product.

Please elaborate on why Multicap provides a solution for investors needs. How should distributors position Canara Robeco Multicap Fund as an investment solution to their customers?

If any investor has to participate in the India Growth Story, then it is not about investing in a specific market cap segment, either large cap or midcap or small cap. It is about investing in large cap and midcap and small cap. It is about the AND not OR. One investment vehicle, which in a structured and disciplined way can give such exposure to large cap and midcap and small cap to investors, is Multicap.

As per SEBI’s regulation, Multicap fund will have minimum 25% exposure to large cap and minimum 25% to midcap and minimum 25% to small cap. We think it is a beautiful structure to capture all market caps and thus Multicap is a good solution to unlock the power of all these 3 Worlds.

One of the ways for distributors for diversifying their customer’s portfolio is by investing in large cap, mid cap and small cap individually and then managing the market cap allocations and keep rebalancing the portfolio. A more efficient way for distributors would be to get their customers to invest in a Multicap product and give their investors exposure to all three market cap.

Secondly, As per the data published by NSE, if you look at market cap winners every year - Winners have been rotating. in CY 12 Mid Cap was the Winner, in CY 13 Large cap was winner, in CY 14 Small Cap was winner and so on.

What I am trying is that, it will be very difficult to predict which market cap segment will be the winner in the short term. From a distributor’s perspective, it is very difficult to keep rotating the allocation of the investor in different market cap segments. So the investment solution that solves this problem is a Multicap strategy providing a disciplined exposure of min 25% to all three market caps.

The third aspect of Multicap strategy is exposure to different industry sectors. If an investor has to participate in the India Growth Story, we need to look at sectors like auto ancillaries, chemicals, Capital goods, services, construction, industrial goods, Hotels, Healthcare etc, so many domestic consumption growth themes are predominantly in the midcap and small cap market cap segments. If you are not in mid and small cap segments you will miss out on participating in these sectors which will play a major role in the India growth story. So in order to participate in the India Growth Story and participation in broader markets - Multicap fund will provide good investment solution for distributors.

Leaders in the Industry across various sectors are also not restricted in one particular sector and they are found across the Market Caps.

Another winning point is the Risk Return profile of the Multicap strategy – this is an excellent vehicle to provide broad market participation with much lower volatility & drawdowns then small cap and mid caps and better return profile than Large cap.

Also Multi cap strategy gives an opportunity to participate across the Company life cycle right when the company is a small cap to when it grows to mid cap and to Large Cap.

Thus overall we believe it’s a must strategy in every investor portfolio with a investment horizon of 5 years and above.

One question that often comes up in social media chats about mutual fund investments is, why should distributors ask their customers to invest in NFOs instead of investing in funds with track records? What will you tell distributors?

NFO gives an opportunity to the fund manager to make a winning portfolio. An existing portfolio may have some winners and some laggards. The laggards will have a drag on the performance of the portfolio. There are no legacy investments in an NFO; the fund manager starts afresh, which can provide good opportunity for investors to invest in a winning portfolio.

What is your engagement plan with mutual fund distributors for Canara Robeco Multicap Fund NFO?

Firstly we went for a extensive NFO promotion across the country and connected with partners across various Partner connect programmes & Road shows explaining them on the product and our investment strategy. Apart from extensive Road shows, numerous digital connect programmes are also organised to reach out to partners and investors.

We also created Presentations, One pagers, Concept Videos, Fund Manager Videos, other marketing enablers in vernacular languages as well to provide support to our partners.

Marketing materials in vernacular languages have been provided to all our partners so that they can reach out to their investors in the language which the investor understands.

Please explain in brief the auto switch facility available to investors in this NFO?

Lot of times, NFO investors say that if I invest in your NFO at the beginning of the NFO period let us say on Day 1 or Day 2 then I lose out on the returns till the NFO units are allotted.

To address this issue we have provided auto switch facility, investor initially can invest in liquid or debt funds of Canara Robeco and can submit an auto switch application form. With this all the units in the liquid or debt scheme will get switched out to the NFO on the last date of the NFO period. This is very good solution for both investors, as they can earn returns even during the NFO period. This saves the distributors also a lot of hassle reaching out to the customer on the last date to subscribe for the NFO because the investor will not lose anything by investing early; in fact, the investor stands to gain in form of higher yield by investing early.

You have explained very comprehensively how Multicap strategy will be beneficial for distributors and their customers. Please summarize the benefits of this NFO for the benefit of distributors. Why should their customers invest in this Canara Robeco Multicap Fund NFO?

If we think about risk return trade off, a Multicap strategy can give customers benefit of both the worlds. They are getting better return profile than large cap and lesser risk than mid / small caps. From a risk / return perspective, Multicap is one of the good solution for investors.

Our Multi cap Fund will aim to achieve for Portfolio Stability and Alpha generation in their portfolio through various parameters.

Disclaimer:

The information used towards formulating the this document have been obtained from sources published by third parties. While such publications are believed to be reliable, the opinions expressed in this document are of personal nature and does not constitute the views of Canara Robeco Asset Management. The above content is for information purpose only and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Recipients of this communication should rely on information/data arising out of their own investigations. Readers are advised to seek independent professional advice, verify the contents and arrive at an informed investment decision before making any investments. Investor shall note that there is no assurance or guarantee that the investment objective of the scheme will be achieved. It is hereby expressly stated that, neither the AMC, its officers, the trustees, the Fund or any of their affiliates or representatives assume any responsibility for the accuracy of such information or the views thereof. Further, CRMF, its Sponsors, its Trustees, CRAMC, its employees, officer, Directors, etc. assume no financial liability whatsoever to the user of this document. This document is for general information purposes only and should not construed as solicitation to invest in the Mutual Fund schemes.

Mutual Fund Investments are subject to market risk, read all scheme related documents carefully