NFO NEST

November 2012

Spate of  IDFs in the offing

The creation of Infrastructure Debt Funds (IDFs) was announced in the Union Budget 2011-12 to facilitate long term financing for the infrastructure sector. IDFs can be created in two ways - as a trust by AMCs and as a company by NBFCs. The RBI will regulate IDFs launched through NBFCs while SEBI will oversee IDFs of AMCs. In March 2012, LIC, Bank of Baroda, Citicorp Finance, and ICICI Group signed a memorandum of understanding (MOU) to set up India’s first infrastructure debt fund through the NBFC route. IDBI Mutual Fund, IDFC Mutual Fund, Birla Sun Life Mutual Fund, ICICI Prudential Mutual Fund, Reliance Mutual Fund, SBI Mutual Fund, L&T Mutual Fund, Srei Mutual Fund, and Axis Mutual Fund have submitted their offer documents to SEBI to launch IDFs. So far, only IDFC Mutual Fund and Srei Mutual Fund have received SEBI nod to set up their IDFs.

Only one capital protection-oriented fund finds its place in the November 2012 NFO NEST.

Sundaram Capital Protection-oriented Fund – Series IX

Opens: November 16, 2012

Closes: November 30, 2012

Sundaram Capital protection-oriented Fund – Series IX is a close-ended fixed income fund with a partial equity orientation. This fund is the latest in a series of similar hybrid close-ended funds by Sundaram Mutual Fund, ninth as far as three-year tenured ones are concerned. The fund will invest 80-100% in debt securities and up to 20% in equities. Debt portfolio will mainly be in triple-A-rated non-convertible debentures (NCDs) and if enough of these are not available, then in bank certificate of deposits (CDs) of public-sector banks. Securitised debt and securities of four sectors – real estate, micro finance, airlines, and information technology – will not be invested in. Equity portion will be re-balanced on a dynamic basis. The fund is benchmarked to CRISIL MIP Blended Index.

Union KBC Trigger 50 Fund – Series 1 and 2, DSP BlackRock Constant Maturity 10Y Bond Fund, DSP BlackRock Constant Maturity 10Y G–Sec Fund, IDFC League 1 Fund, IIFL Dynamic Bond Fund, Motilal Oswal MOST Prime Equity Fund, ICICI Prudential Infrastructure Debt Fund, ICICI Prudential Dividend Yield Equity Fund, JP Morgan India Income Opportunities Fund, DSP BlackRock Cash Manager Fund, Birla Sunlife Infrastructure Debt Fund Series A & B, and DSP BlackRock Ultra Short Term Fund are expected to be launched in the coming months.