NJ Balanced Advantage Fund (NBAF) receives Rs 5200 crore

The parent company NJ Group has its own extensive mutual fund distribution arm, with a presence in over 600 districts across 35 states

NJ AMC’s debut fund receives a bumper subscription of Rs 5200 crore

NJ Mutual Fund, part of the NJ Group founded by Neeraj Choksi and Jignesh Desai, received its Asset Management (AMC) license in April 2021. The newest entrant to the mutual fund industry has made a stellar debut with its first NJ Balanced Advantage Fund (NBAF), with inflows exceeding Rs 5200 crore. The distinction was previously held by PineBridge’s (which later merged with Kotak MF) maiden NFO that collected Rs 1104 crore during the peak of the bull-run in 2007. 

Why has the fund received such a bumper subscription?

The Surat-based NJ Group is not new to the mutual fund industry. In fact, it is the biggest mutual fund distributor in the country in terms of commission earned and has consistently been amongst the top five national distributors over the last 10 years. 
The parent company NJ Group has its own extensive mutual fund distribution arm, with a presence in over 600 districts across 35 states. Only about Rs 230 crore of the inflows have come from the 140 non-NJ distributors and registered investment advisers. 

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‘NJ Wealth contributes more than ₹118,000 crores of the MF industry’s current AUM. The group also has a Portfolio Management Service (PMS) that manages about ₹3,000 crores in assets’, as per the funds CEO Rajiv Shastri.
Over the last 18 years, the NJ group has diversified into a wide range of financial services ranging from products distributor network, asset management, real estate, insurance broking, training & development and technology. 

How is the NBAF fund?

Balanced advantage funds are actively managed funds that relieve you from the troubles of deciding asset allocation. The NBAF will switch between equity and fixed income investments depending on market conditions. When equity markets seem overvalued, the fund will liquidate positions and park funds to minimise capital erosion. Conversely, when valuations fall, the fund switches back to equities at an affordable price.

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What should investors know about the fund house?

As per the founders, the fund house will focus on a rules-based and smart-beta driven approach rather than one that overly depends on the fund manager. 
‘There is a growing opportunity in rule-based investing that has attracted a lot of attention and AUM in developed markets, which is more or less missing in India. A cursory look at fund flows indicates that not only the bulk of fresh flows but also a dominant portion of assets are now managed through rule-based methodologies in developed markets. This is an almost vacant space in the Indian retail MF marketplace, which we plan to inhabit,’ said Mr Shastri.

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