Unifi's Bold Move: Flexi Cap Fund NFO Eyes Growth Across All Market Caps!

The UNIFI FLEXI CAP FUND is an open-ended equity scheme offered by Unifi Mutual Fund, categorized under Flexi Cap Funds. Launched on May 19, 2025, the New Fund Offer (NFO) will close on May 30, 2025. The fund aims to deliver long-term capital appreciation through active management and a bottom-up investing approach, primarily focusing on equity and equity-related instruments across various sectors and market capitalizations.

It is ideal for investors with a long-term horizon seeking growth-oriented opportunities. The minimum subscription amount is ₹5,000. There is no entry load, while an exit load of 1% applies if redeemed within 12 months of allotment; no exit load applies after 12 months.

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Key features of Unifi Flexi Cap Fund - Direct (G)

• Scheme Name: UNIFI FLEXI CAP FUND
• Scheme Type: Open Ended
• Scheme Category: Equity Scheme – Flexi Cap Fund
• Launch Date: 19-May-2025
• Earliest Closure Date: 30-May-2025
• Offer Closure Date: 30-May-2025

Investment Strategy of Unifi Flexi Cap Fund

• The Unifi Flexi Cap Fund - Direct (G) adopts an active investment strategy anchored to growth businesses with long-term capital appreciation as its objective.
• It follows a bottom-up stock selection approach, while also factoring in top-down structural trends to identify fundamentally sound companies.
• The portfolio will consist of diversified equity and equity-related instruments across sectors and market capitalizations – large, mid, and small caps.
• Focus will be on companies demonstrating strong business growth, value migration, margin expansion, or market share gains from unorganized sectors.
• The fund will look for undervalued stocks trading at a discount to intrinsic value with strong earnings growth visibility.

Objective of TUnifi Flexi Cap Fund

To generate long-term capital appreciation by actively managing a diversified portfolio of equity and equity-related securities across market capitalizations, focusing on fundamentally strong growth businesses.

Risks Associated with Unifi Flexi Cap Fund

• Market Risk: Being equity-focused, the Unifi Flexi Cap Fund - Direct (G) is exposed to fluctuations in the stock market, which may be influenced by economic, political, or other global factors.
• Liquidity Risk: Some small- or mid-cap stocks or structured instruments might face challenges in exiting positions due to limited buyers in adverse market conditions.
• Valuation Risk: Stocks selected based on growth potential may see volatile valuations if market expectations shift or company performance underwhelms.
• Securitized Debt Risk: Includes credit risk, prepayment risk, and reinvestment risk, especially in instruments like ABS or MBS that are sensitive to borrower behavior.

Risk Mitigation Strategy by Unifi Flexi Cap Fund

The NFO employs a comprehensive risk mitigation framework tailored to each asset class and market condition:

• Equity Risks are monitored via attribution analysis to understand under- or over-performance relative to the benchmark. The scheme ensures sector and stock diversification to manage concentration and volatility.
• Liquidity Risk is mitigated by investing in actively traded stocks across large, mid, and small caps. Stock turnover is reviewed regularly to maintain adequate liquidity.
• Interest Rate & Credit Risk in Debt Instruments is minimized by holding investment-grade securities rated by SEBI-registered credit rating agencies. Duration management and interest rate derivatives are used prudently to hedge interest rate movements.
• Securitized Debt Risks are managed by choosing asset classes with historically lower default rates and by tracking the collateralization structure.
• Currency & Country Risk in overseas investments is hedged using permitted instruments such as currency futures, forwards, and swaps. The overseas investment universe is selected based on strong fundamentals and governance.

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What Type of Investor Should Invest in Unifi Flexi Cap Fund?

• Investors seeking long-term capital appreciation with a time horizon of at least 5–7 years.
• Those who prefer active fund management based on rigorous research and stock picking rather than passive index tracking.
• Investors who can tolerate short- to medium-term volatility in returns due to equity market exposure.
• Those looking to diversify their portfolio across sectors, market capitalizations, and corporate events like M&A or value unlocking opportunities.
• Investors willing to gain exposure to growth-oriented businesses that may not always be part of consensus holdings.
• Individuals who are comfortable with intermittent underperformance relative to the market in exchange for potentially superior long-term performance.