Should you invest in IDFC Equity Opportunity-Series 1?

IDFC Mutual fund has launched IDFC Equity Opportunity- series 1, a closed-ended three-year equity scheme. The scheme's investment objective is to generate capital appreciation by investing in equities and equity related instruments. Kenneth Andrade is the fund manager and BSE 500 is its benchmark index. Fund manager will invest at least 65% of the money in equities, a maximum of 35% of the money can be invested in debt and money market instruments.

The fund will try to pick up stocks on the basis of long track record and good corporate governance. Consistent cash flows or attractive dividend yields will also be considered in the stock selection process along with strong balance sheets of the companies. The fund in the initial stage would be in small companies my market capitalization, which are expected to benefit from an expected recovery in the Indian economy.

The fund offers dividend option. You can also invest in this fund taking direct route. You need minimum Rs 5000 to invest in this fund. There is no entry or exit load in this fund. The units will be listed on the Bombay Stock Exchange. The new fund offer closes tomorrow - April 10.

Why invest: To generate capital appreciation by investing in stocks that may benefit the most in the process of economic recovery.

Why not invest: Being a closed ended equity fund, units will be listed on the stock exchange, and there is slim chance that the investors can exit at net asset value.