Sunrise Bluechip Fund Will Bet on NEPSE's Best Performers: Interview with Sunrise Capital CEO Bijaya Lal Shrestha

Sunrise Capital Limited is floating units of its new scheme Sunrise Bluechip Fund to the general public from Chaitra 1, 2077. We have taken a brief interview with Mr. Bijaya Lal Shrestha, CEO of Sunrise Capital Limited about the new scheme and its benefits to the investors.

What kind of scheme is Sunrise Bluechip Fund?

Sunrise Bluechip Fund is the second mutual fund scheme under Sunrise Mutual Fund. Sunrise Bank Limited is the Fund Sponsor of the scheme and Sunrise Capital Limited is the Fund Manager and Depository. It is a close-ended fund that will be traded on Nepal Stock Exchange.

Talking more about the fund, generally, mutual funds in Nepal invest in every type of stock whether it's large-cap, mid-cap, or small-cap. Also, some schemes have also invested in companies with poor fundaments. But Sunrise Bluechip Fund is quite different from existing mutual fund schemes in Nepal. Our new scheme will invest predominantly invest in blue-chip companies and emerging blue-chip companies that are traded in NEPSE.

Many investors might not know much about Bluechip Stocks. Can you please put light on what bluechip stocks really are?

Blue-chip are those companies that give out high returns and outperform markets over a long period of time. Bluechip stocks are shares of very large and well–recognized companies with a long history of sound financial performance. These stocks are known to have the capability to endure tough market conditions and give high returns in good market conditions. Bluechip stocks generally cost high, as they have a good reputation and are often market leaders in their respective industries.

However, a company might not always remain bluechip. With the passage of time depending upon performance, some companies might get out of the category while some companies might get inside the bluechip category. Fund Management and Research team of Sunrise Bluechip Fund constantly monitors such changes and acts accordingly.

What are the objectives of Sunrise Blue Chip Fund?

The primary investment objective of the Scheme is to seek to provide long–term capital appreciation from a portfolio that is invested predominantly in equity and equity–related securities of blue–chip large-cap companies and emerging blue-chip companies.

The scheme is meant for investors (Individual and institutional) seeking to invest for the long term in values stocks with a high market cap, strong fundamentals, and consistent dividend payout. In general, Sunrise Bluechip Fund is a company of stock Fund and Bond Fund with the majority of investments in Bluechip Fund will focus on investing in "A Class" stocks defined by NEPSE and company's own Stock Grading Policy.

What are the stock selection strategies of the scheme?

There are many criteria that differentiate bluechip stocks from other stocks. However, Sunrise Bluechip Fund shall focus on 3 broad criteria for selecting stocks.

• Quality of Management

- Capable and Credible management teams

- Strong corporate governance

• Quality of Business Model

- Strong competitive positioning & sustainable competitive advantage

- Strong process and systems which come with scale and size

- Strong franchise which has seen many business cycles

• Quality of financials

- Attractive ROE/ROCE

- Strong cash flow Generation

- Healthy balance sheets

Among all eighteen Mutual Funds, why do you suggest investors invest in Sunrise Blue Chip Fund?

Well, Sunrise Bluechip Fund is currently one of its kind in the Nepalese mutual fund market. As SBF’s prime investment focus is on bluechip and emerging bluechip companies of different industries, this gives us an extra edge in the market. Unlike, other funds, Sunrise Bluechip Fund will be less volatile and capable of enduring market fluctuations even in tough times. Also, the fund will be capable enough to deliver long-term returns to its unitholders. In nutshell, SBF ensures security and the best return to its unitholders.

Likewise, Sunrise Bluechip Fund may help unitholders achieve their Targeted Financial Goals. Long Term goals such as children's education & their future, retirement, or any other long-term growth that needs a wealth creation plan might be fulfilled through this scheme. However, these returns are not guaranteed by the scheme.

How strong is your supervisor team?

Our Fund Sponsor- Sunrise Bank Limited has appointed the Supervisor Team of Sunrise First Mutual Fund for Sunrise Bluechip Fund too. Our team of supervisors consists of highly experienced members from different sectors of the Nepalese economy and they have proven to be an asset to Sunrise Mutual Fund as a whole.

Mr. Krishna Bahadur Manandhar is Ex. Deputy Governor of NRB with 36 year's work experience in Nepal Rastra Bank. Similarly, Mr. Chandi Prashad Shrestha is Ex. Home Secretary of Government of Nepal with 28 year's work experience in a high level of government services. Also, Mr. Purna Man Shakya who is currently serving as Chairman of the Supreme Court Bar Association has 30 year's work experience as a Professor in TU, advocate, and senior advocate. Mr. Buddhi Prashad Acharya who a Chartered Accountant by profession, is Ex. Managing Director of Nepal Telecom along with 18 Year's work experience in an Audit Firm and Nepal Telecom. Lastly, Mr. Sudhir Kumar Sharma who is also a Chartered Accountant has  20 Year's work experience in various Banking and Financial Institutions.

Their valuable inputs have really played a key role in the growth of NAV of SFMF and I believe that this will continue in SBF too.

How is the First scheme– Sunrise First Mutual Fund performing?

Sunrise First Mutual Fund floated its units to the public when the Nepalese capital market was in a bearish trend and investors’ psychology was very weak. Although the market situation was not favorable during our entry, we were able to distribute 7% in the first nine months of our operation. We invested our significant portion of funds during the bearish period and that decision has really paid well. We were fully able to tap the current bull run of the market with a NAV of Rs. 15.05 till the month of Magh 2077. The average annual return of the scheme as of Magh end, 2077 is 46%.

At last, any suggestions for the existing and new investors?

Nepalese Capital Market has witnessed major developments in the last few years in both primary and secondary markets. Increasing participation in IPO and the introduction of the Online Trading System have really changed the facet of the Nepalese Capital Market in a short period of time. I really believe these factors have played a key role in the current rise of the NEPSE index. The number of new investors entering the secondary market is increasing day by day which is a very good thing for our market. However, one should not forget the risk side of the market too. I think investment in mutual funds really helps new investors to develop a good perspective of the market in their initial days in the market. Also, it is beneficial for other active and experienced investors to add some stability to their current portfolios. Thus, I urge all investors to invest in SBF. SBF is knocking on the doors of investors from Chaitra 1. I hope it will receive a warm welcome from every investor especially from those who are looking for comparatively safer investment in the stock market with the best long-term returns.

Application Procedure:

• Please visit the nearest branches of Bank and Financial Institution to apply in units through C-ASBA.
• If you are Meroshare user, visit cdsc.com.np and apply in the units of Sunrise Bluechip Fund.