Monday, September 15, 2008

NFO Nest
(September 2008)

NFOs go the IPO way…

With the gyrations in the stock market, a mere 17 equity fund schemes were launched in the period between March and August, 2008. Many schemes failed to mobilise decent money needed to make worthwhile investments. This sordid scenario apart, majority of the offerings this month are aggressive!

The following funds find their place in the NFO Nest in September, 2008.
IDFC Strategic Sector (50-50) EquityFund
Opens: 28 Aug, 2008 Closes: 18 Sept, 2008

Half of the IDFC Strategic Sector (50-50) Equity Fund will be a diversified equity fund and half will be an opportunistic sector fund. The fund aims to be ahead of the curve in identifying a sector with depth which is core part of the Indian economy with an investment time frame of 1-2 years. The structure of the fund will allow it to take concentrated positions in companies in a sector. The fund may also invest in debt and money market instruments. The fund with half of its equity allocation managed as a diversified equity fund will provide stability while the rest of the portfolio can be more volatile or an out of favour market segment. This will be a relatively aggressive equity fund comparable to the opportunity funds. The fund is benchmarked against the Nifty and will be managed by Mr. Kenneth Andrade.

Escorts Power and Energy Fund
Opens: 25 Aug, 2008 Closes: 23 Sept, 2008

Escorts Power and Energy Fund is an open-ended sector fund. The fund aims to provide income distribution and medium to long-term capital gains by investing predominantly in equity/equity (65-100%) related instruments of the companies in the power/energy sector and/or debt/money market instruments (0-35%). Investment in securitised debt will not exceed 40% of the debt component of the scheme. The fund is benchmarked against BSE Power Index and will be managed by Mr. Rajesh Sharma.

ICICI Prudential S.M.A.R.T Fund
Opens: 18 August 2008 Closes: 1 Oct, 2008
ICICI Prudential S.M.A.R.T (Structured Methodology Aiming at Returns over Tenure) Fund - Series C and Series F are closed ended plans that seek to provide investors with equity market linked returns while aiming to protect against the downside. The fund will invest up to 95 per cent in equity-linked debentures with returns linked to the movement of the Nifty. In order to achieve equity-linked returns, the fund would invest in debentures issued by a third party/parties which provide an indicative coupon rate. The coupon would also be linked to an index – Nifty in this case, to participate in the returns arising from stocks. Such returns, linked to the index, would come with a cap. The coupon is also designed in such a manner that even in case of a decline in the index, the capital plus an indicative yield would still be generated. It will also invest 0-100 per cent in investment grade debt securities. It is important to note that this fund is not a capital protection scheme and does not offer any guaranteed/assured interest or repayment of principal as the investments are subject to credit risk. However, the fund plans to invest in quality debt securities to minimise this risk. Mr. Chaitanya Pande will be the fund manager of the scheme.

Bharti AXA Equity Fund
Opens: 4 Sept 2008 Closes: 1 Oct, 2008

Bharti AXA Mutual Fund is all set to launch its first equity diversified fund, Bharti AXA Equity Fund. The objective of the scheme is to invest in equity and equity derivatives across all market capitalizations. Thus the scheme aims to be a diversified multi-cap fund. 65–100 per cent of assets will be allocated in equity and equity related securities while debt & money market securities/instruments will constitute 0–35 per cent. Investments in derivative instruments shall not exceed 50 per cent of net assets of the portfolio. No investments will be made in securitized debt. The fund house, in an attempt to differentiate its products among other mutual fund products, has introduced a new facility of ECO Plan with all its schemes. Under this plan, investors investing up to Rs. 2 lakh and who opt to receive all communications in electronic form would get an additional benefit of lower annual recurring charges. Bharti AXA Equity Fund offers investors the option of a daily SIP. Interestingly, investors can also opt for a daily systematic transfer plan by investing a lump sum in Bharti AXA Liquid Fund and transferring a specified amount to Bharti AXA Equity Fund on a daily basis. Minimum instalment for daily SIP/STP is Rs.300 and in multiples of Rs.100 thereafter. The minimum investment instalment amount for the monthly SIP/STP is Rs.1,000. Mr Prateek Agrawal will be the fund manager of the scheme.

Birla Sun Life Commodity Equities Fund
Opens: 15 Sept, 2008 Closes: 14 Oct, 2008

Birla Sun Life Commodity Equities Fund is an open-ended fund that provides long-term capital growth by investing in securities of domestic and overseas commodity companies i.e. companies engaged in or focusing on the specified commodity business and/or overseas mutual fund scheme(s) that have similar investment objectives. The fund will invest a minimum of 80% of its assets in equities and equity-linked instruments, which includes 65-100 per cent investments in overseas securities. Birla Sun Life Commodity Equities Fund offers three plans: Global Precious Metals Plan, Global Agri Plan and Global Multi Commodity Plan. Investors can enjoy the benefits of diversification by investing in Global Precious Metals Plan (benchmarked against Dow Jones Precious Metals Index), Global Agri Plan (benchmarked against S&P Global Agribusiness Index), and Global Multi Commodity Plan (benchmarked against MSCI World Index). Ankit Sancheti and Vineet Maloo will manage the scheme.

The DWS Global Agri-Business Off-Shore Fund, JP Morgan Latin America Fund, JP Morgan Emerging Europe Fund, JP Morgan Middle East and Africa Fund, JP Morgan Greater China fund, JP Morgan Asean Equity Fund, JP Morgan India Tax Advantage Fund, Goldman Sachs India Equity Fund, Bharati AXA Short Term Income Fund, Bharati AXA Monthly Income Plan, HDFC Select Equity Fund, JM Moving Sector Fund, Franklin MENA Fund (Middle East and Northern Africa), Shariah Benchmark Exchange Traded Fund, HDFC Real Estate Fund, ABN Amro Sector Select Fund and SBI Capital Protection oriented Fund Series III are expected to be launched in the coming months.

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