Monday, February 21, 2011

NFO NEST
February 2011

Off to a good start in 2011!

2010 saw 17 new fund offerings collect about Rs 2,600 crore, down 44% (Rs 5,900 crore) than what was collected in 2009. This also pales in comparison with the NFO collections during the peak of the bull-run between August 2007 and January 2008, when 33 schemes collected about Rs 21,770 crore. The highly volatile equity markets in 2010 as compared to an upswing in 2009 may to a great extent explain this trend. DSP BR Focus 25 fund, launched in April, made the highest collections of about Rs 700 crore. In stark contrast was ICICI Prudential Nifty Junior Index Fund, which collected just about Rs 1 crore. Interestingly, of the 40 asset management companies only 12 raised funds last year. With the market regulator advising asset management companies against launching schemes that overlapped with offerings, some of the bigger players such as HDFC, Franklin, and UTI did not launch any schemes. Seven of the 17 schemes launched were index-based.

It is raining NFOs in February 2011 … eight NFOs are currently on offer out of which four are capital protection-oriented funds.

Canara Robeco Gilt Advantage Fund
Opens: February 14, 2011
Closes: February 23, 2011

Canara Robeco Gilt Advantage Fund, an open ended gilt scheme, aims at generating returns commensurate with low credit risk by predominantly investing in the portfolio comprising of short to medium term government securities guaranteed by the central and state governments with weighted average portfolio duration not exceeding 3 years and treasury bills with low to medium risk profile. The benchmark index for the scheme will be I-Sec Si-Bex Index. The fund will be managed by Ms. Suman Prasad.

Canara Robeco Capital Protection oriented Fund
Opens: February 11, 2011
Closes: February 24, 2011

Canara Capital Protection Oriented Fund, a 3 year close-ended capital protection oriented Fund, seeks capital protection by investing in high quality fixed income securities maturing on or before the maturity of the scheme and seeks capital appreciation by investing in equity and equity related instruments. The scheme is rated AAAf (SO) by CARE. The scheme follows a passive investment strategy for the fixed income component of the scheme wherein the fund will be investing only in the highest rated fixed income securities with the objective of capital protection. The equity component of the scheme will be primarily invested in diversified equity and equity related securities of the companies that have a potential to appreciate in the long run. The asset allocation of the scheme will be 75-100% in debt and money market instruments and 0-25% in equity and equity linked instruments. The fund provides an attractive investment opportunity for risk–averse investors looking at a marginal equity exposure. This fund will try to capture the current rates of interest in the debt portion of the portfolio while the equity portion is expected to deliver returns. The benchmark index for the scheme is Crisil MIP Blended Index. The fund managers for the scheme will be Ritesh Jain and Anand Shah.

IDFC Infrastructure Fund
Opens: February 14, 2011
Closes: February 28, 2011

IDFC has launched a pure play infrastructure fund called IDFC Infra Equity Fund. The investment objective of the scheme is to generate long-term capital growth through an active diversified portfolio of predominantly (80-100%) equity and equity related instruments of companies that are participating in and benefiting from growth in Indian infrastructure and infrastructural related activities. The fund is designed to be ‘true-to-label'. It defines infrastructure using benchmark definitions of RBI and World Bank. It would allocate upto 20% of assets in debt and money market instruments with low to medium risk profile. The scheme benchmark index will be BSE 200. The fund manager for the scheme will be Mr. Kenneth Andrade.

Reliance Gold Savings Fund
Opens: February 14, 2011
Closes: February 28, 2011

Reliance Gold Savings Fund is the first gold fund of fund in the industry which opens a new avenue for investing in gold as an asset class. The fund seeks to provide returns of gold through investments in Reliance Gold Exchange Traded Fund, which in turn invests in physical gold. It offers returns of gold in a paper form without the need of a demat account. It is a passively managed fund which would enable an investor to save for gold in a convenient manner either through lump sum investment or through systematic investment. The fund will help the investors with add on facility like systematic withdrawal plan, systematic transfer plan, auto- switch, and trigger facility. It aims to give investors the opportunity to participate in the bullion market in a relatively cost effective and convenient way as you can directly purchase and sell the units at the AMC. The scheme would allocate 95% - 100% of assets in Reliance Gold Exchange Traded Fund with medium to high risk profile and up to 5% of assets in reverse repo and /or CBLO and/or short-term fixed deposits and/or schemes which invest predominantly in the money market securities or liquid schemes with low to medium risk profile. The scheme performance will be benchmarked against the price of physical gold. The fund manager for the scheme will be Hiren Chandaria.

IDBI Monthly Income Fund
Opens: February 14, 2011
Closes: February 28, 2011

IDBI Monthly Income Plan, an open-ended income scheme, aims at providing regular income along with opportunities for capital appreciation through investments in a diversified basket of debt, equity, and money market instruments. The scheme would allocate up to 80%-100% of assets in debt instruments (including floating rate debt instruments and securitized debt) and money market instruments. Investment in securitized debt will be only in investment grade rated papers and will not to exceed 25% of the net assets of the scheme. It would allocate up to 20% of assets in equity and equity related instruments only such companies, which are the constituents of either the S&P CNX Nifty Index (Nifty 50) or the CNX Nifty Junior Indices (Nifty Junior) comprising a combined universe of 100 stocks. These two indices are collectively referred to as the CNX 100 Index. The equity portfolio will be well diversified and actively managed to ensure the scheme's investment objectives are realized. The benchmark index for the scheme is Crisil MIP Blended Index. The fund managers for the scheme will be Gautam Kaul and Syed Sagheer.

Sundaram Capital Protection Oriented Fund – Series 2
Opens: February 15, 2011
Closes: February 28, 2011

Sundaram Capital Protection Oriented Fund Series 2 is a closed ended scheme with a tenure of 5 years from the date of allotment. The objective of this scheme would be to seek income and minimise risk of capital loss by investing in a portfolio of fixed income securities and a part of the assets in equity to seek capital appreciation. The scheme will allocate 70% to 100% of assets in fixed income securities including money market instruments with low to medium risk profile. It would further allocate up to 30% of assets in equity and equity related securities with high risk profile. Exposure to derivatives will be limited to 50% of the net assets. The scheme's portfolio structure has been rated as AAA (so) by CRISIL which indicates highest degree of certainty regarding payment of face value of the investment to unit-holders. The fund will be benchmarked against Crisil MIP Blended Index. The fund will be managed by Mr. Dwijendra Srivastava and Mr. S.Krishnakumar.

SBI Capital Protection Oriented Fund – Series II
Opens: February 18, 2011
Closes: March 4, 2011

The SBI Capital Protection Oriented Fund-Series II, a 5 year closed-end scheme, provides an opportunity to investors to invest in the equity market with a strategic equity exposure, blended with the protection of capital. The scheme has been rated an mfAAA (SO) by ICRA. Investment will be made in stocks listed on BSE/NSE having a market cap equal to or higher than the market cap of the least market capitalized stock of BSE 100 Index. While the equity part of the fund will be managed actively, the scheme shall follow a passive investment strategy for the fixed income component. Investments in debt securities in the scheme, viz central government securities or debt issued by AAA/P1+ or equivalent rated corporate, will be largely limited to those having maturities not exceeding the residual maturity of the scheme. The fund’s benchmark index is the BSE 100 Index. The fund managers for the scheme will be Rajeev Radhakrishnan for debt and R. Srinivasan for equity.

HDFC Debt Fund for Cancer Cure
Opens: February 18, 2011
Closes: March 4, 2011

HDFC Mutual Fund proposes to commemorate the 10th anniversary by a unique philanthropy initiative of launching HDFC Debt Fund for Cancer Cure (‘H-DFCC'), a three-year close-ended capital protection oriented income scheme, in association with the Indian Cancer Society (ICS). An investor will have a unique option of donating the dividends earned, on his investments, either partly or wholly, to ICS. The donation of dividend to ICS is eligible for tax deduction under Sec 80G of Indian Income-tax Act, 1961. Such donations will be utilised by the trust to provide financial aid for cancer treatment, nutritional supplement, accommodation and counselling. The fund will invest up to 80-100% of its corpus in debt instruments and up to 20% in government securities. The minimum investment is of Rs 1 lakh and in multiples of Rs 1,000 thereafter. The benchmark for the fund is the Crisil Short Term Bond Fund. The fund will be managed by Mr Anil Bamboli, who manages other debt funds such as HDFC Multiple Yield Fund and HDFC High Interest Fund.

H-DFCC stands out for a few special features. One, the fund doubles up as an investment vehicle and also helps contribute to charity. Two, donation of the dividend declared by the fund is eligible for deduction under Section 80G of the Income Tax Act. And thirdly, as the objective is partly charitable in nature, no investment management and advisory fee would be levied by HDFC AMC, although there would be some recurring expenses incurred to run the fund.

Birla Sunlife Interval Income Fund, BNP Paribas Capital Protection-oriented Fund, Daiwa Gilt Fund, ICICI Prudential Lakshya Fund, and IDFC Quarterly Interval Funds are expected to be launched in the coming months.

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