NFO NEST

May 2010

Spicy NFO treats await you this month too. From a capital protection-oriented fund to a concentrated fund and an index fund and finally some broad thematic funds…

Birla Sun Life Capital Protection Oriented Fund – Series 2

Opens: April 21, 2010
Closes: May 21, 2010

Birla Sun Life Capital Protection Oriented Fund – Series 2 is a closed end capital protection oriented scheme. The investment objective of the scheme is to seek capital protection by investing in high quality fixed income securities maturing in line with the tenure of the scheme and seeking capital appreciation by investing in equity and equity related instruments. The scheme will have duration of 36 months from the date of allotment of units. The scheme will allocate 80% - 100% of assets in debt securities and money market instruments with low to medium risk profile. It will further invest up to 20% of assets in equity and equity related instruments with high risk profile. The Benchmark Index of the scheme will be CRISIL MIP Blended Index. The scheme will be managed by Satyabrata Mohanty.

DSP Black Rock Focus 25 Fund

Opens: April 23, 2010
Closes: May 21, 2010

DSP Black Rock Focus 25 Fund is an open ended equity growth scheme investing largely in companies, which are amongst the top 200 companies by market capitalisation. The portfolio will limit exposure to companies beyond the top 200 companies by market capitalization to 20% of the net asset value. The scheme will normally hold equity and equity-related securities including equity derivatives, of up to 25 companies. The scheme will allocate 65% to 100% of assets in equity and equity related securities, which are amongst the top 200 companies by market capitalization. It will further allocate up to 35% of assets in debt securities, money market securities, and cash & cash equivalents. The scheme will have a concentrated portfolio adopting a highly flexible investment approach. A significant percentage of risk paring on account of diversification can be achieved with relatively fewer stocks, provided they are not of a similar type. While adding more stocks increases the degree of diversification, the ability of the scheme to generate relatively higher returns recedes as the number of stocks in the portfolio increases. But a focused investment strategy may mean wearing a risk profile that is perhaps a tad higher than that of diversified equity funds that have a predominant large-cap bias. In addition, having a focused portfolio would make the fund highly reliant on the fund manager's ability to consistently make the right (and well-timed) sector and stock selection. Such a high reliance on too few stocks could therefore make returns volatile, with scope for wild swings on either side. The fund may also have a higher portfolio turnover ratio given its concentrated portfolio and the need to hold outperforming stocks. DSP BR Focus 25 Fund, therefore, appears best suited only for investors with a high-risk appetite. The performance of the scheme will be benchmarked against BSE Sensex. The scheme will be managed by Apoorva Shah.

Baroda Pioneer Infrastructure Fund

Opens: May 3, 2010
Closes: May 31, 2010

Baroda Pioneer AMC has come out with Baroda Pioneer Infrastructure Fund to help you capture the investment opportunities in Indian infrastructure. The fund aims to generate long-term capital appreciation by investing in equity and equity-related securities of companies engaged in infrastructure and related areas. The fund will primarily invest in businesses such as construction, engineering, finance, energy, mining & minerals, and communications. The fund manager will invest at least 65% of the portfolio in equity and equity-related instruments of companies in above mentioned sectors. Up to 35% of the money can be invested in fixed income and money market instruments. The scheme will not have a sector or market capitalisation bias. The fund manager will invest using a combination of top down and bottom up approach to investing to ensure that a long term core infrastructure portfolio is built offering good risk adjusted returns to the investors. This fund is targeting the key catalyst which is definitely required for the growth of India, namely, building the infrastructure in order to deliver inclusive growth. There are 16 other such open-ended funds in the mutual fund industry that invest in the infrastructure theme. Baroda Pioneer Infrastructure Fund will be managed by Dipak Acharya who comes with 20 years of experience. The fund has been benchmarked against CNX 100.

IDBI Nifty Index Fund

Opens: May 3, 2010
Closes: May 31, 2010

IDBI Asset Management Company’s first fund, IDBI Nifty Index Fund, will allocate its assets in all the stocks comprising S&P CNX Nifty Index in the same weightage in which they are represented in the index. The fund will provide diversification to investors across 50 stocks in 22 sectors and will represent about 60 per cent of the National Stock Exchange’s (NSE) total market capitalisation. The scheme will allocate 95-100% of assets in Stocks in the S&P CNX Nifty Index and derivative instruments linked to the S&P CNX Nifty Index. It will invest 0 - 5% in Cash and Money Market Instruments. The fund portfolio is pre-defined and independent of human judgement. The fund intends to achieve its investment objective by minimising the tracking error between the total index returns and the fund. This is the 16th index fund to be launched in the entire mutual fund industry which tracks the S&P Nifty Index. The scheme's performance would be benchmarked against S&P CNX Nifty index. The scheme would be managed by Mr. Gautam Kaul.

Birla Sun Life India Reforms Fund

Opens: May 10, 2010
Closes: June 9, 2010

Birla Sun Life India Reforms Fund aims at generating growth and capital appreciation by building a portfolio of companies that are expected to benefit from the economic reforms, PSU divestment, and increased government spending. The scheme plans to allocate 65 per cent to 100 per cent of assets in equity and equity related instruments with medium to high risk profile. It will further allocate up to 35 per cent of assets in debt and money market instruments (including securitized debt) with low to medium risk profile. The India Reforms Fund Scheme will be invested in multiple sectors at any point in time, which may be at different stages of reform. The main aim of the BSL India Reforms Fund is to invest in such companies which would get the direct benefit and gain from various economic reforms put forth by India. Hence this is a sectoral fund with a difference since it is not entirely focused on one single sector but many which are bound to get reform benefits from Indian Government. The scheme will be managed by Mr. Ankit Sancheti and will be benchmarked against S&P CNX 500

SBI PSU Fund

Opens: May 17, 2010
Closes: June 14, 2010

SBI PSU Fund will mainly invest in a basket of stocks of Public Sector Undertakings (PSUs) and a small portion in debt instruments issued by PSUs. While it will invest up to 100 per cent in equities of PSU, it may also allocate up to 35 per cent in debt. Through this fund, the fund house aims at capitalising on stored value through disinvestment. Disinvestment tends to improve price discovery, valuation, and liquidity of such stocks. The fund will cherry pick PSUs that are likely to emerge as more robust and vibrant players in different industries of the economy as the disinvestment process takes place. The industries where PSUs have a strong presence are infrastructure, exploration, and exploitation of oil and natural resources, technology development, and capital goods. Currently there are two other funds falling under the equity category which follow a similar investment strategy - Sundaram BNP Paribas PSU Opportunities Fund (launched in December 2009) and Religare PSU Equity (launched in October -2009). Others are ETFs -- Kotak PSU Bank ETF and PSU Bank BeES. SBI PSU Fund will be managed by Rama Iyer Srinivasan. The fund will be benchmarked against BSE PSU Index.