Monday, October 17, 2011

October 2011

Yearning for the yellow metal!

Record-level gold prices may have dampened the demand for jewellery, but it has hardly dented investors’ appetite for products based on the yellow metal. Gold schemes with the facility to make periodic purchases, floated by Reliance Mutual Fund, Kotak Mutual Fund and SBI Mutual Fund, have seen sizeable inflows, prompting other asset management companies to plan similar product launches. ICICI Prudential opened its gold fund-of-fund NFO for subscription last month. Birla Mutual Fund and Baroda Pioneer Mutual Fund have filed drafts with market regulator SEBI to launch such schemes and many others are expected to follow suit. Fund houses are looking to cash in on the frenzy for gold products among investors, who are fleeing stocks because of the uncertainty over the debt crisis in Europe and worries about a recession in the US. Little wonder that two of the four funds in the October 2011 NFONEST are gold funds.

Tata Retirement Fund
Opens: October 7, 2011
Closes: October 21, 2011

Tata Mutual Fund is launching India’s first ever retirement specific mutual fund scheme, a carefully structured suite of plans designed to meet the investment needs of investors in different age brackets. It offers three unique options to investors – Progressive Plan, Moderate Plan and Conservative Plan - with varied percentage of equity and debt assets. The progressive plan, for investors aged below 45, will have 85% to 100% allocation to equity; the balance, if any, will be invested in debt. Once the investor turns 45, the corpus will be switched to the moderate plan, where the equity allocation is lower between 65% and 85%. Finally, when the investor turns 60, the investments will be shifted to the conservative plan, which will have debt allocation between 70% and 100%, with a small part of 0% to 30% going to equity. Tata Retirement Savings Fund is specifically designed keeping in mind the young and middle aged working generation. The fund is tailor-made to support the monetary needs of investors post their retirement so that they can meet the 30:30 challenge. With increasing life expectancy, one can assume a post retirement life of 30 years after 30 earning years. The challenge clearly is the ability to maintain the same life style post retirement. Tata Retirement Savings Fund comes with a unique “Auto-Switch” feature, which does away the hassles of adjusting the equity-debt proportion with increasing age. Normally, an investor depends on his advisor for switching assets between equity and debt with increasing age. Yet another unique feature of the fund is the “Auto-Systematic Withdrawal” facility. This is designed with the objective of providing the investors with regular cash flows after they turn 60. The “Auto-Systematic Withdrawal” facility comes with two options of Monthly - 1% of market value of investment as on date of completion of 60 years of age or Quarterly - 3% of market value of investment as on date of completion of 60 years of age. The performance of Progressive Plan of the scheme will be benchmarked against BSE SENSEX while Moderate Plan and Conservative Plan of the scheme will be benchmarked against CRISIL Balanced Fund Index and CRSIL MIP Blended Index respectively. The fund will be jointly managed by Mr.Bhupinder Sethi, Mr. Murthy Nagarajan and Dinesh Da Costa (for overseas portfolio).

HDFC Gold Fund
Opens: October 7, 2011
Closes: October 21, 2011

HDFC Gold Fund, an open ended Fund-of-Funds scheme, will enable investors to invest systematically in gold, hedge their risks against market volatility and to effectively diversify their portfolio. Gold FoFs enable the investors to invest through a single investment or through Systematic Investment Plan (SIP). The minimum denomination of investment is Rs 100. The corpus collected through the NFO will be invested in HDFC Gold ETF to seek capital appreciation. As at the end of the September quarter, HDFC Mutual Fund managed average assets worth Rs 91,827.11 crore.

Pramerica Credit Opportunities Fund
Opens: October 7, 2011
Closes: October 21, 2011

Pramerica Mutual Fund has launched Pramerica Credit Opportunities Fund, an open-ended debt scheme. The objective of the scheme is to generate income by investing in debt /and money market securities across the credit spectrum. The scheme will also seek to maintain reasonable liquidity within the fund. The scheme will invest 100% of assets in debt securities and money market instruments with low to medium risk profile. The Benchmark Index for the scheme will be CRISIL Composite Bond Fund Index. The fund manager of the scheme will be Mr. Mahendra Jajoo.

Opens: October 19, 2011
Closes: November 2, 2011

IDBI Mutual Fund has launched IDBI Gold Exchange Traded Fund, an open ended Gold Exchange Traded Scheme. The investment objective of the scheme is to invest in physical Gold and Gold related instruments with the objective to replicate the performance of Gold in domestic prices. The ETF will adopt a passive investment strategy and will seek to achieve the investment objective by minimizing the tracking error between the fund and the underlying asset. The scheme will invest 95% to 100% of assets in gold and gold related instruments and up to 5% of assets in debt and money market instruments with low to medium risk profile. The Benchmark Index will be domestic price of physical Gold. The scheme will be managed by Mr. Gautam Kaul.

Daiwa Dynamic Bond Fund and Daiwa Gilt Fund are expected to be launched in the coming months.

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