Monday, December 19, 2011

NFO NEST
December 2011

Drowning of the Equity Fund drought?


After several months of drought, new equity schemes are surfacing again from the stables of old fund houses. Last week, LIC Nomura and Canara Robeco filed offer documents for open-ended equity-oriented schemes with the Securities and Exchange Board of India. These are the first such scheme documents filed for pure-play equity schemes by experienced fund houses in more than a year. According to the SEBI website, the last such scheme document was filed 15 months ago, in September 2010, when IDFC Mutual Fund had filed for a small cap fund. SEBI began to discourage look-alike schemes towards the later half of 2009. Since then only new fund houses filed and got approvals for launching plain open-ended equity schemes. Older fund houses tried new product structures like gold funds, life stage funds, children funds, capital protection funds, etc. to make sure their new offer does not resemble existing ones.


Keeping out the experienced fund houses, which have well-oiled distribution machinery, has hit inflows coming into the industry significantly. According to figures by the Association of Mutual Funds in India, just eight equity schemes were launched in the first 10 months of 2011. They collected Rs 602 crore, at an average collection of Rs 60 crore a month. In four of these months, not even a single new equity scheme was launched. In comparison, 20 schemes were launched in the first 10 months of 2010 raising Rs 4,570 crore. Average collection was much higher at Rs 457 crore a month. To put things in perspective, in the first 10 months of this year, 565 closed ended debt schemes, most of which were fixed maturity plans, raised Rs 99,450 crore.


Sundaram CapitalProtection-oriented Fund(3years–series 7)

Opens: December 7, 2011
Closes: December 19, 2011


Sundaram Capital Protection Oriented Fund 3 Years (Series 7) is a closed ended debt fund with an investment objective to seek income and minimise risk of capital loss by investing in a portfolio of fixed income securities. The fund may invest a part of the assets in equity to seek capital appreciation. The fund'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 scheme will allocate 80% to 100% of assets in fixed income securities including money market instruments with low to medium risk profile. It would further allocate up to 20% of assets in equity and equity related instruments with a high risk profile. Exposure to derivatives will be limited to 50% of the net assets. Benchmark Index for the scheme is CRISIL MIP Blended Index. Dwijendra Srivastava will manage the debt portion and the equity portion will be managed by Srividhya Rajesh.

DWS Interval Fund (Series 1)
Opens: December 7, 2011
Closes: December 19, 2011


Deutsche Mutual Fund has launched a new fund named as DWS Interval Fund – Series 1, a closed ended debt fund with an investment objective to generate income by investing in debt and money market instruments maturing on or before the beginning of the immediately following Specified Transaction period of the scheme. The scheme would invest 100% of assets in domestic debt instruments including government securities and money market instruments with low to medium risk profile. Benchmark index for the scheme is Crisil Liquid Fund Index. The fund manager for the scheme will be Kumaresh Ramakrishnan.


L & T Short Term Debt Fund
Opens: December 7, 2011
Closes: December 21, 2011

L & T Short Term Debt Fund is an open-ended fund with an investment objective to generate returns for investors with a short-term investment horizon by investing in fixed income securities of shorter term maturity. The portfolio could comprise of CDs, CPs, government securities, money market and other debt/ fixed income instruments having shorter-term maturity. The fund would allocate 65% to 100% of assets in debt and money market instruments with residual maturity up to 24 months with low risk profile. On the other side, it would allocate up to 35% of assets in debt instruments with residual maturity greater than 24 months and less than 60 months with low to medium risk profile. The scheme may invest in securitized debt up to 50% of the portfolio. The fund is an appropriate fixed income product for investors who can benefit in the short term from the possible change in interest rate scenario in the coming quarters. CRISIL Short Term Bond Fund Index is the benchmark index for the fund. The fund will be managed by Ms. Bekxy Kuriakose.

Axis Capital Protection-oriented Fund (Series 3)
Opens: December 9, 2011
Closes: December 23, 2011

Axis Capital Protection oriented Fund – Series 3 is a close-ended capital protection oriented fund with an investment objective to protect the capital by investing in a portfolio of debt and money market instruments that are maturing on or before the maturity of the fund. The fund also aims to provide capital appreciation through exposure to equity and equity related instruments. The fund will invest 80%-100% in debt and money market instruments including derivative instrument up to 75% of the net assets of the scheme. And 0%-20% in equity and equity related instruments. The fund is benchmarked against Crisil MIP Blended Index. The fund will be managed by Mr. R. Sivakumar and Mr. Sudhanshu Asthana.

IDBI Dynamic Bond Fund, Canara Robeco Multicap Fund, Morgan Stanley Gilt Fund, Quantum Multi Asset Fund, Baroda Pioneer Sensex Plus Fund, Union KBC Small and Midcap Fund, SBI Tax Advantage Fund Series II, and LIC Nomura Midcap Fund are expected to be launched in the coming months.

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