From Direct plan only to Aladdin to model portfolios: Key facts about JioBlackRock Large Cap fund

Jio BlackRock Mutual Fund has filed an offer document with SEBI to launch an open-ended equity scheme named 'JioBlackRock Large Cap Fund'.

The New Fund Offer (NFO) price for units would be ₹10 during the NFO. Entry load and Exit load will be nil. The scheme seeks to collect a minimum target amount of ₹10 crore.

Key facts about JioBlackRock Large Cap Fund

Interestingly, the document states the scheme shall offer only Direct Plans (Growth Option).

"The AMC may introduce further plan/s and Option/s in future, subject to regulations," as per the scheme information document of JioBlackRock.

Most mutual funds in India offer two versions:

Regular Plan: Where you pay a commission to a broker/distributor (hidden in a higher expense ratio).

Direct Plan: Where you buy directly from the AMC with no distributor commission (lower expense ratio).

• Since there are no distributor commissions, more of your money stays invested.

• You will likely need to use the JioBlackRock website, app, or a direct platform to invest.

One may invest in mutual funds directly i.e., without involving or routing the investment through any distributor/agent in a ‘Direct Plan’.

Direct Plan has a lower expense ratio than the Regular Plan, as there is no distributor/agent involved, and hence there is a saving in terms of distribution cost/commissions paid out to the distributor/agent, which is added back to the returns of the scheme. Hence, a direct plan has a separate NAV, which is higher than the regular plan's NAV.

In due course, the lower expense ratio of the Direct Plan translates to higher returns on the investments, which keeps compounding over the years. Thus, the investment in the Direct Plan would be worth more over a period, in comparison to investment in the Regular Plan of the same scheme.

JioBlackRock Mutual Fund is introducing the Model Portfolios Facility, a digital-only offering designed to simplify investment decisions.

This facility provides investors with pre-constructed model portfolios, comprising curated combinations of existing JioBlackRock Mutual Fund schemes, for different investment styles and/or themes.

All transactions related to Model Portfolios, including First/additional purchases, rebalancing, and partial or full redemptions, will be available exclusively on the JioBlackRock AMC website and mobile app.

Investors are required to refer to the detailed terms and conditions of the Model Portfolios Facility, available on the AMC’s website and mobile app, before making any investment.

The Facility will be available on an ongoing basis. However, inclusion of this scheme within the facility will be at the sole discretion of the AMC.

The portfolio construction process is powered by BlackRock's technology platform, Aladdin, which has been licensed to JioBlackRock AMC.

This process is augmented by an optimisation process which leverages the composite research score along with other inputs from the investment team such as risk constraints, transaction cost, market liquidity, sector or stock constraints and such other inputs.

Final investment decisions continue to rest with the Fund Managers based on the data referenced above, but may also factor in specific subjective analysis of underlying securities.

Who cannot invest?

The following persons are not eligible to invest in the scheme and apply for subscription to the units of the Scheme:

• Overseas Corporate Bodies, as defined under the Foreign Exchange Management Act, 1999.

• Investor residing in any Financial Action Task Force (FATF) designated High Risk jurisdiction.

• A person who is a resident of Canada.

• United States Person as defined under the extant laws of the United States of America, except permitted categories as per AMC guidelines and applicable regulations.

The investment objective of the scheme is to generate long term capital appreciation by predominantly investing in equity and equity-related instruments of large-cap companies.

The performance will be benchmarked against BSE 100 Index (TRI). The minimum application amount is Rs 500 and any amount thereafter.

Who manages the scheme?

The JioBlackRock Large Cap Fund will be managed by Tanvi Kacheria and Sahil Chaudhary, both managing the scheme since its inception. Kacheria, a CFA charter holder with a BA from the University of Southern California, has experience at BlackRock Financial Management and Los Angeles Capital Management. Chaudhary, with a B.Tech in ICT, has worked in multi-asset research and equity management at BlackRock Services India and FIL Research. Both oversee other JioBlackRock funds and will handle portfolio construction and investment decisions for this scheme.

Disclaimer: This article is written purely for informational purposes and should not be considered investment advice from Upstox. Investors should do their own research or consult a registered financial advisor before making investment decisions.