NFO NEST
March 2012

Tough times ahead for NFOs…

SEBI has proposed that, a Mutual Fund New Fund Offer (NFO) will be approved only if it is able to attract a minimum level of investor interest. To be specific, it will be approved only if a certain amount of minimum corpus is invested in it by the public - Rs. 10 crores for equity funds and Rs. 20 crores for debt funds. If there is low investor interest and there are not many buyers, the NFO will be scrapped. This will make the lives of fledgling and small mutual fund houses difficult because, until they can establish themselves in the Indian mutual fund industry, they will not be able to attract investor money. Unfortunately, in this case, unless they attract at least Rs.10 crores for equity funds (Rs.20 crores for debt funds) their mutual fund will not even be approved. So, it is like a double-edged sword for the mutual fund houses. If the new fund is not able to attract enough funds (Rs 10 or 20 crores as the case may be), then the fund has to be closed and the money invested by the investors has to be returned in the next 15 – 20 days. SEBI has also stated that, if the refund fails to happen within the next 6 weeks (from date of closure), the fund house is supposed to pay an interest of 15% to the investors.

DSPBR Dual Advantage Fund – Series 2
Opens: March 12, 2012
Closes: March 20, 2012

DSP Black Rock Dual Advantage Fund - Series 2 is a 36 month close-ended income scheme. The primary investment objective of the scheme is to generate returns and seek capital appreciation by investing in a portfolio of debt and money market securities. The scheme also seeks to invest a portion of the portfolio in equity & equity related securities to achieve capital appreciation. As far as investments in debt and money market securities are concerned, the scheme will invest only in securities, which mature on or before the date of maturity of the scheme. The fund would allocate 50% to 100% of assets in debt securities, up to 25% of assets in money market securities and up to 25% of assets in equity & equity related securities. Debt securities may include securitized debt instruments up to 50% of the net assets. The fund will be managed by Mr. Dhawal Dalal.

DWS Interval Fund – Series 3
Opens: March 13, 2012
Closes: March 20, 2012

Deutsche Mutual Fund launched a new debt interval scheme named DWS Interval Fund – Series 3, with a maturity time of 93 days. The objective of the scheme is 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 asset allocation of scheme will be in such a way that the objective of the scheme to generate income will be met, through investments in debt and money market instruments. Hence, the scheme will allocate 0 to 100% of assets in domestic debt instruments including government securities and money market instruments. The performance of the scheme will be standardized against CRISIL Liquid Fund index and Kumaresh Ramkrishnan will be the Fund Manager of the scheme.

Axis Income Fund
Opens: March 9, 2012
Closes: March 21, 2012

Axis Mutual Fund launched a new open-ended income fund called “Axis Income Fund”. The scheme will endeavour to generate optimal returns in the medium term while maintaining liquidity of the portfolio by investing in debt and money market instruments. The scheme will allocate up to 100% of assets in debt and money market instruments with low to medium risk profile. The performance of the scheme will be standardized against CRISIL Composite Bond Fund Index and R. Sivakumar and Mr. Ninad Deshpande will be the Fund Managers for the scheme.

Birla Sunlife Capital Protection-oriented Fund– Series 9
Opens: March 12, 2012
Closes: March 26, 2012

Birla Sun Life Mutual Fund has launched a new fund named as Birla Sun Life Capital Protection Oriented Fund – Series 9, a close-ended capital protection oriented scheme. The investment objective of the scheme is to seek capital protection by investing in fixed income securities maturing on or before the tenure of the scheme and seeking capital appreciation by investing in equity and equity related instruments. The performance of the scheme will be benchmarked against CRISIL MIP Blended Index and will be managed by Mr. Satyabrata Mohanty.

ICICI Prudential Capital Protection-oriented Fund II – Series 8
Opens: March 16, 2012
Closes: March 26, 2012

ICICI Prudential Capital Protection Oriented Fund – II –Series 8 (24 Months Plan) is a close-ended Capital Protection Oriented Fund. The objective of investment in the Fund is to try to protect capital by investing a portion of the portfolio in good quality debt securities and money market instruments (88%–100%) and also to provide capital appreciation by investing the balance in equity and equity related securities (0% – 12%). The performance of the fund will be benchmarked against CRISIL MIP Blended Index. Chaitanya Pande and Rajat Chandak will be the fund manager(s) of the fund. The former will take care of debt investment and the latter of equity investment.

Reliance US Dollar Fund, IDFC Balanced Fund, SBI Hybrid Edge Fund, SBI Sensex ETF Fund, DSPBR US Flexible Equity Fund, IDFC Infrastructure Debt Fund, IDBI Infrastructure Debt Fund, India Bulls Income Fund, and IDFC Bank CD Fund are expected to be launched in the coming months.