NFO NEST

May 2014

NFO mania closing in on close ended equity funds

It is a season of new equity fund offers. The category, which had gone into a long slumber after the Lehman crisis, has suddenly started showing a gust of launches. As many as 24 NFOs in the equity segment have hit the market over the past six months, garnering nearly Rs 3,000 crore. An earlier trend of close-ended equity schemes has also resurfaced. Rather, a majority of equity NFOs were close-ended products, with a lock-in period of two to five years. ICICI Prudential, Reliance, and IDFC were among the prime fund houses which launched such schemes.

The euphoria surrounding close end funds does not seem to have subsided yet. Three more fund houses – Birla Sun Life, Reliance, and Sundaram have come out with their NFOs to launch close-end equity funds. Thus, three out of the five NFOs in the April 2014 NFONEST fall in the close-end equity fund category.

Sundaram Top 100 - Series II

Opens: May 5, 2014

Closes: May 23, 2014

Sundaram Mutual Fund has unveiled a new fund named as Sundaram Top 100 - Series II, a close ended equity fund with a tenure of three years from the date of allotment. Sundaram TOP 100, intended as a wealth building tool for investors, endeavours to unearth the deep value hidden in several Indian companies. The investment objective of the fund is to generate capital appreciation from a portfolio that is substantially constituted of equity securities specified as eligible securities for Rajiv Gandhi Equity Savings Scheme, 2012. The fund will invest 95%-100% of assets in equity securities specified as eligible securities for RGESS with medium to high risk profile and invest up to 5% of assets in cash and cash equivalents and money market securities with low to medium risk profile. Investments made in money market instruments shall have residual maturity of up to 91 days. Benchmark Index for the fund is CNX 100. The fund will be managed by J. Venkatesan.

Reliance Close Ended Equity Fund II - Series A (G)

Opens: May 9, 2014

Closes: May 23, 2014

Reliance Mutual Fund has launched a new fund named as Reliance Close Ended Equity Fund II - Series A, a close ended equity oriented fund. The tenure of the fund shall be five years from the date of allotment. The investment objective of the fund is to provide capital appreciation to the investors, which will be in line with their long term savings goal, by investing in a diversified portfolio of equity and equity related instruments with small exposure to fixed income securities. The fund will allocate 80% to 100% of assets in equity and equity related instruments with high to medium risk profile and it would allocate up to 20% of assets in debt and money market instruments with medium to low risk profile. Benchmark Index for the fund is S&P BSE 200 Index. The fund managers are Shailesh Raj Bhan and Jahnvee Shah.

Birla Sun Life Emerging Leaders Fund - Series 2

Opens: May 16, 2014

Closes: May 26, 2014

Birla Sun Life Mutual Fund has launched a new fund named as Birla Sun Life Emerging Leaders Fund - Series 2, a close ended equity fund. The fund will have a duration of three years from the date of allotment. The primary objective of the fund is to generate long-term capital appreciation by investing predominantly in equity and equity related securities of small and mid cap companies. The fund would invest 80% to 100% of assets in equity and equity related securities out of which 70%-100% will be in small and midcaps and up to 30% in securities other than small and midcaps.  Up to 30% will be invested in securities with high risk profile and 20% of assets will be in cash, money market, and debt instruments with low risk profile. Benchmark Index for the fund is S&P BSE Midcap Index. The fund manager will be Hitesh Zaveri.

ICICI Prudential Multiple Yield Fund - Series 6 – Plan F

Opens: May 15, 2014

Closes: May 28, 2014

ICICI Prudential Mutual Fund has launched a new fund as ICICI Prudential Multiple Yield Fund - Series 6 - Plan F, 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 70% 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 and it would allocate 5% to 30% of the assets in equity or equity related securities with medium to high risk profile. Out of the investments in debt instruments, 82%-87% would be invested in AA rated non convertible debentures. The benchmark index for the fund will be Crisil MIP Blended Index. Rahul Goswami and Aditya Pagaria will jointly manage the debt portion and equity portion will be managed by Rajat Chandak. The investments under the ADRs/GDRs and other foreign securities will be managed by Abhishek Pathak.

HDFC Capital Protection Oriented Fund - Series II (36M) May 14 – Regular (G)

Opens: May 16, 2014

Closes: May 30, 2014

HDFC Mutual Fund has launched a new plan named as HDFC Capital Protection Oriented Fund- Series II - 36M May 2014, a close ended capital protection oriented fund with the duration of 36 months from the date of allotment. The investment objective of the plan 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 plan would invest 75% to 100% of assets in debt and money market instruments with low to medium risk profile and invest up to 25% in equity and equity related instruments (including equity derivatives) with high risk profile. Benchmark Index for the plan is CRISIL MIP Blended Index. The fund managers are Anil Bamboli (Debt Portfolio) and Vinay R Kulkarni (Equity Portfolio). Rakesh Vyas will be dedicated fund manger for Overseas Investments.

ICICI Prudential Value Fund Series – 5 to 8, ICICI Prudential Small Cap Fund, UTI Capital Protection Oriented Fund – Series IV, Sundaram Select Small cap Series II-IV, Reliance Debt Opportunities Fund (Plan A to E), DWS Global Top Dividend Fund, Kotak Equity Monthly Income Plan, Axis Ultra Short Term Fund, Axis Medium Term Fund, DSP Blackrock Japan Nikkei 225 Fund, DSP BlackRock European Fund, DSP BlackRock World Healthscience Fund, DWS German Equities Fund, DWS Corporate Debt Opportunities Fund, SBI Dual Advantage Fund – series IV – VI, Birla Sunlife Emerging Leaders Fund – Series 3 & 4, LIC Nomura Diversified Equity Fund – Series 1 & 2 are expected to be launched in the coming months.