NFO NEST

September 2013

FMPs to the fore

Mutual funds have ramped up the number of new fund offer (NFO) launches in the Fixed Maturity Plan (FMP) category in a bid to lure back investors who have raised redemption pressure in debt funds due to negative returns in July 2013. In August 2013, fund houses have launched nearly 35 NFOs with FMP, taking the monthly average of launches in this category to twice that in the June 2013 quarter. Funds expect FMPs to receive fresh inflows, as short-term interest rates have jumped up substantially compared with bank fixed deposits following the Reserve Bank's recent liquidity-tightening measures. FMPs offer a certain level of predictable returns, which lure investors to such products. These are close-ended debt funds that follow a lock-in strategy, and thus closely resemble bank FDs. But, post-tax returns from FMPs are usually higher than bank FDs.

Equity NFOs are still conspicuous by their absence in the September 2013 NFONEST.

SBI Debt Fund Series 366 Days - 40

Opens: September 16, 2013

Closes: September 17, 2013

SBI Debt Fund Series aims to provide regular income, liquidity, and returns to the investors through investments in a portfolio comprising of debt instruments such as government securities, PSU and corporate bonds and money market instruments maturing on or before the maturity of the fund. Hence, the fund will allocate the assets accordingly. For funds with maturity up to 16 months, the funds shall invest up to 100% in debt and money market instruments. For funds with maturity more than 16 months, the funds shall invest 60%- 100% in debt and up to 40% in money market instruments. Exposure to domestic securitized debt may be to the extent of 40% of the net assets. The fund shall not invest in foreign securitized debt. The performance of the fund will be benchmarked against CRISIL Short Term Bond Index and CRISIL Composite Bond Fund Index. Rajeev Radhakrishnan will be the Fund Manager of the fund. 

ICICI Prudential Multiple Yield Fund–Series 5–Plan A

Opens: September 5, 2013

Closes: September 19, 2013

ICICI Prudential Mutual Fund has launched a new fund named as ICICI Prudential Multiple Yield Fund - Series 5 - Plan A, a close-ended income fund. The tenure of the plan is 1100 days. The primary objective of the fund is to seek to generate returns by investing in a portfolio of fixed income securities/ debt instruments. The secondary objective of the fund is to generate long term capital appreciation by investing a portion of the fund's assets in equity and equity related instruments. The fund will allocate 75% to 95% of assets in debt securities (including government securities) with low to medium risk profile. It would allocate up to 20% of assets in money market instruments, cash and cash equivalents with low to medium risk profile. On the flip side, it would allocate 5% to 30% of the asset in equity or equity related securities with medium to high risk profile. Of the investments in debt instruments, 80% to 85% would be invested in AA rated non-convertible debentures. The benchmark index for the fund will be CRISIL MIP Blended Index. Rahul Goswami, will manage the debt portion of investments under the fund. The equity portion will be managed by Rajat Chandak. The investments under the ADRs/GDRs and other foreign securities will be managed by Atul Patel.

HDFC Capital Protection Oriented – I – 36M

Opens: September 16, 2013

Closes: September 30, 2013

HDFC Mutual Fund has launched the New Fund Offer (NFO) of HDFC CPO - I - 36M, a close-ended income fund. The investment objective of the fund is to generate returns by investing in a portfolio of debt and money market securities, which mature on or before the date of maturity of the fund. The fund also seeks to invest a portion of the portfolio in equity and equity related securities to achieve capital appreciation. The portfolio of the fund will be structured in a manner that the debt allocation of the portfolio will lead to orientation towards protection of capital at the time of maturity and equity allocation of the portfolio will provide upside over the face value. The performance of the HDFC Capital Protection Oriented Fund – Series I would be benchmarked against CRISIL MIP Blended Index. Mr. Anil Bamboli (debt portfolio) and Mr. Vinay Kulkarni (equity portfolio) will be the Fund Managers for HDFC Capital Protection Oriented Fund - Series I. Both the fund managers managing large portfolios are associated with HDFC Mutual Fund for several years.

ICICI Prudential Capital Protection Oriented Fund – IV – Plan D

Opens: September 19, 2013

Closes: October 1, 2013

ICICI Prudential Mutual Fund has unveiled a new fund named as ICICI Prudential Capital Protection Oriented Fund IV - Plan D - 60 Months, a close-ended capital protection oriented fund. The investment objective of the fund is to seek to protect capital by investing a portion of the portfolio in highest rated debt securities and money market instruments and also to provide capital appreciation by investing the balance in equity and equity related securities. The securities would mature on or before the maturity of the Plan under the fund. The fund will allocate 70% to 100% of assets in debt securities and money market instruments with low to medium risk profile. On the flipside, it would allocate up to 30% of assets in equity and equity related securities with medium to high risk profile. The fund's performance will be benchmarked against CRISIL MIP Blended Index. Debt portion of the fund will be managed by Rahul Goswami and equity portion will be managed by Rajat Chandak. The investments of the fund in ADR/GDR and other foreign securities are being handled by Atul Patel.

Pramerica Alpha Equity Fund, IDBI Tax Saving Fund, Reliance Interval Fund - II, LIC Nomura CPO Fund Series 1, Union KBC Focussed Equity Fund, Pramerica Retirement and Pension Fund, Principal PNB Dual Advantage Fund Series D1 and E1, DSP Blackrock Banking and PSU Debt Fund, Axis Infrastucture Debt Fund – Series I, JP Morgan India Banking Income Fund, Reliance US Equity Opportunities Fund, ICICI Prudential Value Fund Series 1 and 2, L&T Emerging Businesses Fund, DWS Inflation Indexed Bond Fund, Morgan Stanley Midcap Fund, Pramerica Absolute Return Fund, LIC Nomura MF Debt ETF, BNP Paribas Dual Advantage Series I, II, and III, Canara Robeco COF  Series 2 Plan A and B, Shriram Balanced Fund, Kotak Medium Term Fund, Motilal Oswal MOSt Ultra Short term Bond Fund, Motilal Oswal MOSt Midcap Focussed 30 Fund, Axis Hybrid Fund Series 8 to 10, Peerless Value Fund, Axis Global Equity Alpha Fund, Axis Asian Opportunities Fund, Axis Fixed Income Opportunities Fund, Peerless Gilt Fund, BOI AXA COP Fund Series I, Axis Yearly Interval Fund Series 1 to 3, DSP Blackrock  Dual Advantage Fund Series 21 to 25, Sundaram Hybrid Fund Series F-J, Birla Sunlife COP Fund Series 16 to Series 18, HDFC Money Market Fund, and HDFC Banking and PSU Debt Fund  are expected to be launched in the coming months.