Monday, December 17, 2007

NFO Nest

Raining Real Estate NFOs!
ING Global Real Estate Fund and ICICI Real Estate Securities Fund NFOs closed a couple of days ago, with the former investing in overseas real estate mutual fund schemes, Real Estate Investment Trusts (REITs) and Real Estate Operating Companies (REOCs), and the latter being a three-year close-ended fund that takes the debt route to investing in realty. This is a unique fund that provides investors with an avenue to earn higher yields, with contained risk. The only other fund focused on real estate is the JM HIFI Fund, an open end equity-oriented fund.
Inundating infrastructure NFOs…more than a third of the NFOs discussed this month are infrastructure funds, adding to the existing gamut of more than a dozen funds.
The following funds find their place in the NFO nest in December, 2007.
Franklin Asian Equity Fund Opens: 19 Nov , 2007 Closes:18 Dec , 2007

Franklin Asian Equity Fund is an open-ended fund which will invest in companies in the Asian region, excluding Japan. As per the stated asset allocation, the scheme will deploy at least 50 per cent of its assets in foreign equity while the domestic equity can go up to 40 per cent. Overall, equity and equity linked instruments would account for at least 70 per cent of the portfolio while up to 30 per cent may be invested in fixed income securities. This equity fund with less than 65% allocation to domestic shares will be deprived of the capital gains exemption for long-term gains, lower short-term capital gains tax and tax-free dividend.
JM Agri and Infra Fund Opens: 19 Nov, 2007 Closes: 18 De , 2007

JM Agri & Infra Fund is a close-ended equity-oriented scheme that will be converted into an open-ended fund after a specified period. It will invest predominantly in equity / equity related instruments of companies that focus on agriculture and infrastructure development of India.

DBS Chola Small Cap Fund Opens: 20 Nov , 2007 Closes: Dec 20 , 2007

The DBS Chola Small Cap Fund is a three-year close-ended fund that would automatically be converted into an open-ended fund at the end of the said period. It proposes to invest at least 65 per cent of the fund proceeds in equity and equity related securities of small companies and upto 35 per cent may be invested in debt and money market instruments. Here, small cap companies are defined as those whose market capitalisation falls between the highest and the lowest constituent of the BSE Small Cap Index. Lot of proven mid caps are available in the market. Pure small cap oriented funds are very few ( DSPML Small Companies Fund and Sundaram BNP Paribas Select Small Cap).

Kotak Indo World Infrastructure Fund Opens: 27 Nov , 2007 Closes: 22 Dec, 2007

Kotak Indo World Infrastructure Fund seeks to generate long-term capital appreciation by investing in stocks of domestic as well as global infrastructure companies. This fund would automatically be converted into an open ended fund after the expiry of three years.The fund proposes to invest at least 65 per cent of the fund proceeds into Indian equities. It has an option of investing between 10-35 per cent in overseas infrastructure fund and upto 35 per cent may be invested in debt and money market instruments.The fund has short-listed a global infrastructure fund of T. Rowe Price (to be launched soon) as the vehicle to invest in overseas markets. This offering taps the growth potential of global infrastructure related companies and helps spread the sharp downside risk, which can be particularly useful when Indian infrastructure stocks go out of favour domestically in a market downturn.

Birla Sunlife Special Situations Fund Opens Dec 17: , 2007 Closes: Jan 15 , 2007
Birla Sun Life Special Situations Fund will invest about 80% in equity and the rest in debt. Among equity, the fund would invest in mergers and acquisitions, PE deals, open offers, delisting and buy backs. Fidelity Fund Management runs a similar fund in India which has risen about 48 percent in the last one year and has ICICI Bank and State Bank of India as its top two holdings.
Standard Chartered Small and Mid-cap Equity Fund, Sahara Fortune Child Fund, Tata Growing Economies Infrastructure Fund, Sahara Power Fund, ABN AMRO China Equity Fund, Principal Global Real Estate Equity Fund and Mirae Asset India Opportunities Fund are expected to be launched in the coming months.

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