Union Value Discovery Fund: NFO Review

Union Asset Management Company has launched a new value fund called Union Value Discovery Fund. The NFO of the scheme would close for subscription on November 28, and it would re-open for continuous sale and repurchase on December 12.

The new scheme would invest primarily in stocks which are currently out of flavour or under-owned but have long-term value. The scheme will be managed by Vinay Paharia.

According to the scheme information document, the portfolio construction of the new scheme would be driven largely by bottom up stock selection. The scheme portfolio would be diversified, and investment would be made across market capitalization. The scheme is benchmarked against S&P BSE 200 Index TRI. The scheme will invest 65 percent to 100 percent of assets in stocks of value companies. Investments in debt and money market instruments are capped at 35 percent.


“We believe this is a good choice for investors looking for value for their money. There are a number of stocks available that are close to their intrinsic value. We are confident that we can create a portfolio of stocks that could benefit investors with long term investment horizon, ” G Pradeepkumar, Chief Executive Officer, Union AMC, had said while launching the scheme.

Should you invest?
“Value schemes are not for all investors. You need to be in the high-risk bracket to invest in them as they can be highly volatile. Also, as on date, there are about 12 Value oriented funds post Sebi reclassification with good track records. Investors who want to play the value theme can look at them rather than betting on a totally new scheme,” says Vivekh Pathak, Founder, Finance and You.

Mutual fund houses like ICICI Prudential Mutual Fund, Aditya Birla Sun Life Mutual Fund and L&T Mutual Fund, already have established value schemes in the market.

Scheme at a glance:
Category: Value Fund
NFO period: November 14 – November 28
Minimum investment: Rs 5,000
Minimum SIP Investment: Rs 2,000
Exit load: 1 percent (if units redeemed or switched out within one year of allotment date)
Plans: Growth, Dividend
Benchmark: S&P BSE 200 Index TRI
Fund manager: Vinay Paharia