NFO NEST

February 2014

 

Flurry of equity NFOs

 

Equity is back in favour if the recent flurry of fund launches is anything to go by. Indian mutual funds were on a selling spree for the greater part of 2013 as redemptions rose and inflows dried up. But things changed in November 2013 after a 19% jump in equity indices attracted investors and pushed wary fund managers into launching new funds. New fund offerings from some of India’s top-rated funds raised Rs 2,400 crore, the biggest such inflow in the past three years, according to data from Morningstar, an investment research firm. Bulk of the money came in November-December 2013 when funds, including the biggest such as ICICI Prudential collected a record Rs. 650 crore in its ICICI Prudential Value Fund. Subsequently, there have been a series of close-end and even open-end equity fund launches. Most of these close-end equity funds are betting on the mid and small cap companies, in anticipation of these companies benefiting, once the economy bounces back.

 

Motilal Oswal MOSt Focused 30 Fund

Opens: February 3, 2014

Closes: February 17, 2014

Motilal Oswal Mutual Fund has launched Motilal Oswal MOSt Focused Midcap 30 Fund, an open-ended equity fund. The investment objective of the fund is to achieve long term capital appreciation by investing in a maximum of 30 quality mid-cap companies having long-term competitive advantages and potential for growth. The fund will allocate 65% to 100% of assets in equity and equity related instruments selected between Top 101st and 200th listed companies by market capitalization, up to 25% in equity and equity related instruments beyond the Top 200th listed company and with market capitalization not lower than the smallest company in the CNX Midcap Index with high risk profile and up to 10% in debt, money market instruments, G-Sec, Bonds, Cash and Cash equivalents etc. with low risk profile. The benchmark index for the fund is CNX Midcap Index. The fund managers will be Taher Badshah (Equity) and Abhiroop Mukherjee (Debt).

 

HSBC Asia Pacific (Ex Japan) Dividend Yield Fund

Opens: February 3, 2014

Closes: February 17, 2014

HSBC Asia Pacific (Ex Japan) Dividend Yield Fund (HAPDYF) is an open ended Fund of Funds from the stable of HSBC Mutual Fund, which will focus on investing predominantly in units of the underlying fund - HGIF Asia Pacific Ex Japan Equity High Dividend Fund (HEHDF) and a small proportion of its assets in money market instruments and/or units of liquid mutual fund schemes. The underlying fund HEHDF is an open ended fund based in Luxemburg which will enable investors to invest in long term investment opportunities available in the emerging markets of the Asia Pacific region. The investment objective of HEHDF is “to seek long-term capital growth and a high level of income by investing primarily in a diversified portfolio of investments in equity and equity equivalent securities of companies which have their registered office in and with an official listing on a major stock exchange or other Regulated Market of any Asia Pacific country (excluding Japan) as well as companies which carry out a preponderant part of their economic activities in the Asia Pacific region (excluding Japan), that offer short-term sustainable dividend yields above the market average and/or the potential for dividend growth above the market average over the short-term”. The fund is of the view that Asian companies are undergoing a structural change: emphasising quality through de-leveraging, cash-flow generation and sustainable earnings. Hence the fund aims at identifying and investing in companies which combine mis-priced profitability with sustainable and attractive dividend yield through bottom up approach and fundamental research. The fund will be managed by the duo Piyush Harlalka and Sanjay Shah.

ICICI Prudential Multiple Yield Fund – Series 6 – Plan A

Opens: February 10, 2014

Closes: February 24, 2014

ICICI Prudential Mutual Fund has launched a close-ended income fund, ICICI Prudential Multiple Yield Fund - Series 6 - Plan A. The primary objective of the fund is to seek to generate returns by investing in a portfolio of fixed income securities/ debt instruments. The secondary objective of the fund is to generate long term capital appreciation by investing a portion of the fund's assets in equity and equity related instruments. The fund will allocate 75% to 95% of assets in debt securities (including government securities) with low to medium risk profile. It will allocate up to 20% of assets in money market instruments, cash and cash equivalents with low to medium risk profile. On the flip side, it will allocate 5% to 30% of the asset in equity or equity related securities with medium to high risk profile. Of the investments in debt instruments, 82% to 87% will be invested in AA rated non-convertible debentures. The benchmark index for the fund will be CRISIL MIP Blended Index. The equity portion of the fund will be managed by Rajat Chandak. Rahul Goswami and Aditya Pagaria will jointly manage the debt portion. The investments under the ADRs/GDRs and other foreign securities will be managed by Abhishek Pathak.

IDFC Equity Opportunities Fund – Series 3

Opens: February 10, 2014

Closes: February 24, 2014

 

IDFC Mutual Fund has launched a new fund named IDFC Equity Opportunity - Series 3, a close-ended equity fund. The tenure of the fund is 21 months from the date of allotment. The fund will invest 80%-100% of its assets in equities and equity related instruments with high risk profile and invest up to 20% of its asset in debt & money market instruments with low to medium risk profile. Investment in derivatives can be up to 50% of the net asset of the fund. Benchmark Index for the fund is S&P BSE 500 Index. The fund aims to create a portfolio of high dividend paying companies with average dividend yield of the portfolio at least 50% higher than the benchmark dividend yield. The fund manager is Ankur Arora.

 

IDBI Debt Opportunities Fund

Opens: February 11, 2014

Closes: February 24, 2014

 

IDBI Mutual Fund announced the launch of IDBI Debt Opportunities Fund, an open ended income fund, which is an accrual based product with focus on generation of interest income. The fund will invest in good quality rated corporate bonds through rigorous selection and monitoring process. The investment objective of the fund is to provide investors with regular income and opportunities for capital appreciation while maintaining liquidity through active management of a diversified portfolio comprising of debt and money market instruments across the investment grade credit rating and maturity spectrum. The fund will invest 0-90% of assets in debt instruments including securitized debt instruments with low to medium risk profile and invest 10-100% in money market instruments with low risk profile. The Benchmark Index for the fund is CRISIL Short Term Bond Fund Index. The fund managers will be Mr. Gautam Kaul and Mr. Anil Dhawan.

 

Reliance Multi Asset Advantage Fund, Motilal Oswal MOSt Focused Multiple Fund, LIC Nomura Mutual Fund Capital Protection Oriented Fund Series 3 to 5, Franklin India Feeder Franklin European Growth Fund, IIFL Global Equity Fund, JP Morgan India Blue Chip Fund, Pramerica Tax Savings Fund, LIC Nomura RGESS – Series 2, and Mirae Asset Global Great Consumer Fund are expected to be launched in the coming months.