Unifi Mutual Fund Completes One Year of Operations..!

Unifi Mutual Fund, part of the Chennai-headquartered Unifi Capital Group, has completed one year of operations. The company recently celebrated its first anniversary. It currently manages assets worth approximately ₹1,580 crore and offers three schemes: a Flexi Cap Fund, Dynamic Asset Allocation Fund, and Liquid Fund.

Unifi AMC Chairman Sarath Reddy on the Journey

Speaking on the occasion, Sarath Reddy, Chairman of Unifi AMC, said:

“When there are nearly 50 mutual fund companies in India offering more than 3,000 schemes, a natural question arose: why does the market need another mutual fund company?

The Unifi Group has been operating for the past 25 years. Our investment philosophy has earned the trust of a wide range of investors, from large investors to small investors. With the objective of extending the same experience and investment approach to retail investors, we began our journey in the mutual fund industry.

This journey has also been built on the same investment philosophy. Through our Flexi Cap and Dynamic Asset Allocation Funds, we are striving to emerge as leading players in their respective fund categories.

Through investor education, we encourage investors to remain invested for the long term. More than 60% of our group’s investors have continued their investments for over five years. We have also invested 25% of our own investments in our funds.”

A Strategy to Reduce Risk

George Alexander, CEO of Unifi Mutual Fund, said:

“We seek to reduce investment risk through diversification and long-term investing. We will soon introduce a fund designed to perform across different market conditions — an ‘Every Market Season’ fund.

Currently, around 10% of our schemes are distributed through Registered Investment Advisors, while approximately 32% are distributed through Mutual Fund Distributors.”

Tax Efficiency Advantage

V.N. Saravanan, Chief Investment Officer of Unifi Mutual Fund, said:

“The NAV of our Dynamic Asset Allocation Fund has been steadily moving upward without experiencing excessive volatility. Through diversification, this fund seeks to reduce risk while also generating attractive returns.

This fund also offers tax efficiency. If the units are sold within two years, the gains are treated as short-term capital gains and taxed according to the investor’s applicable income-tax slab.

However, if the investment is sold after two years, the gains qualify for long-term capital gains taxation, and the investor is taxed at 12.5%, irrespective of the applicable income-tax slab.

During an Initial Public Offering (IPO), we invest in fundamentally strong companies for our Flexi Cap Fund. On the other hand, if there is an opportunity to benefit from potential listing gains, we may consider such investments for the Dynamic Asset Allocation Fund.”

Freedom to Invest Across Market Segments

Aejas Lakhani, Fund Manager of the Unifi Flexi Cap Fund, said:

“In a Flexi Cap Fund, the fund manager has the flexibility to decide how much to invest across large-cap, mid-cap and small-cap stocks. This flexibility allows us to actively allocate investments across market segments and strive to generate attractive returns for investors.”

The Importance of Asset Allocation..

Maran Govindasamy, Director on the Trustee Board of Unifi Mutual Fund, discussed the importance of asset allocation in a conversation with Hari Viswanath, Portfolio Editor, BusinessLine.

Speaking during the discussion, Maran said:

“In equity-oriented investments, such as company shares and equity mutual funds, investors may experience volatility of around 20% to 23%. However, over the long term, it may be possible to generate average annual returns of around 12% to 15%.

In comparison, if investments are diversified across different asset classes such as equities, debt instruments, real estate and gold, volatility can potentially be reduced to around 5% to 6%, while generating average annual returns of around 11% to 12% over the long term.

In other words, by spreading investments across multiple asset classes, investors may be able to achieve relatively attractive returns with lower overall risk.”

The event concluded on a positive note, with experts providing detailed answers and clarifications to various questions raised by investors.