NFO NEST

April 2014

 

 Income funds to the fore

 

The number of NFOs launched by mutual funds in February 2014 has been the highest since March 2012. According to the monthly data posted by the Association of Mutual Funds in India, 140 new schemes were launched in the month of February amounting to investments of Rs 22,347 crore. The last time fund houses launched a higher number of schemes was in March 2012 when the 157 new schemes launched garnered assets worth Rs 36,361 crore. Of the total of 140 schemes that were launched, 131 were fixed income schemes, five equity schemes and one each from the gilt, overseas fund of funds, ELSS-equity and the infrastructure debt fund category. The income funds garnered assets to the tune of Rs 30,812 crore most of which came from fixed maturity plans (FMPs). Out of the 131 income schemes, 128 were FMPs according to a report by CRISIL. The financial year-end typically sees a spurt in FMP launches as investors are drawn to the indexation and double indexation benefits these offer, depending on the tenure. In February 2014, fund houses garnered Rs 21,300 crore by launching 128 FMPs compared with Rs 11,300 crore garnered in January through 75 FMP launches.

Equity fund NFOs have made rare appearances in the recent past and April 2014 is no exception as is evident from the April 2014 NFONEST.

Sundaram Hybrid Fund - Series G (5 year) – Regular Plan (G)

Opens: April 7, 2014

Closes: April 21, 2014

Sundaram Mutual Fund has launched a new fund named as Sundaram Hybrid Fund - Series G, a five year close end income fund. The objective of the fund will be to generate capital appreciation and current income, through a judicious mix of investments in equities and fixed income securities. The fund will allocate up to 65%-90% of assets in fixed income securities, up to 20% of assets in money market instruments and cash equivalent with low to medium risk profile and invest up to 10%-35% in equity and equity-related instruments with high risk profile. The fund’s performance will be benchmarked against CRISIL MIP Blended Index. Siddharth Chaudhary is the fund manager for the debt portion and Shiv Chanani is the fund manager for the equity portion.

HSBC Managed Solutions Fund

Opens: April 9, 2014

Closes: April 23, 2014
 

HSBC Mutual Fund has launched an open ended fund of fund called HSBC Managed Solutions Fund, which will invest in existing schemes of HSBC Mutual Fund – both domestic and international funds. The fund aims to provide long term capital appreciation through an active asset allocation by investing in equity funds, debt funds, gold ETFs, offshore mutual funds, and money market instruments. The fund is available in three options – growth, moderate, and conservative based on the risk profile of the investors. Growth option has more exposure to equity and the exposure comes down further in moderate and conservative plans. In addition, the growth option will be benchmarked against BSE 200 and Composite Bond Index while moderate and conservative options will be benchmarked against CRISIL Balanced Fund Index and CRISIL Composite Bond Index, respectively.  HSBC Managed Solutions is a holistic solution based on the principle of active Asset Allocation. This active asset allocation-based solution helps contain portfolio volatility and positions it well to deliver better risk-adjusted returns over the long term. HSBC Managed Solutions builds in regular rebalancing as a core feature which helps the portfolio remain aligned to the needs of the investor. Sanjay Shah, Gaurav Mehrotra, and Piyush Harlalka will co-manage the fund.

 

Religare Invesco Global Equity Fund - Regular Plan (G)

Opens: April 15, 2014

Closes: April 28, 2014

Religare Invesco Mutual Fund has launched a new fund as Religare Invesco Global Equity Income Fund, an open ended fund of fund. The investment objective of the fund is to provide capital appreciation and / or income by investing predominantly in units of Invesco Global Equity Income Fund, an overseas equity fund which invests primarily in equities of companies worldwide. The fund may at the discretion of the fund manager, also invest in units of other similar overseas mutual funds with similar objectives, strategy and attributes which may constitute a significant portion of its net assets. A globally diversified portfolio benefits from the performance of various underlying markets and limits exposure to a single overseas market, theme or sector thereby reducing country-specific risks and volatility. Pursuing investments in global markets help in curbing portfolio volatility given their low correlation to Indian equity market. The fund will invest up to 95%-100% of its asset in shares of Invesco Global Equity Income Fund or other similar overseas mutual funds with high risk profile and invest up to 5% in debt and money market securities (including government and corporate debt) / units of debt and liquid funds of Religare Invesco Mutual Fund with low to medium risk profile. The benchmark Index for the fund will be MSCI World Index-Net Dividend. The fund manager will be Neelesh Dhamnaskar.

ICICI Prudential Value Fund - Series 4 – Regular Plan (D)

Opens: April 21, 2014

Closes: April 28, 2014

"Good companies at Discounted prices" – the value investment philosophy of ICICI Prudential Mutual Fund is the theme behind launching the fund. It is a close ended equity fund and the fund portfolio would comprise of focused 25-30 high conviction stocks by following the 'value investing philosophy'. The investment objective of the fund is to provide capital appreciation by investing in a well-diversified portfolio of stocks through fundamental analysis. The fund aims to find commendable companies at reasonable price rather than generic companies at bargain price, capture profits by selling equities or using derivatives, declare commensurate dividends, and invest in multi-cap stocks. The fund proposes to invest in stocks that are trading at a huge discount in the BSE 500 index and plans to book profit and distribute dividends regularly rather than waiting for 2-3 years as that could even wipe out the gains. On the debt side the investment will be only in those securities that mature on or before the date of maturity of the fund. Performance of the fund will be benchmarked to the S&P BSE 500 index. Mrinal Singh, Rajat Chandak, and Ashwin Jain will be the fund managers.

ICICI Prudential Capital Protection-oriented Fund V – PlanE

Opens: April 15, 2014

Closes: April 29, 2014

ICICI Prudential Mutual Fund has launched ICICI Prudential Capital Protection Oriented Fund V - Plan E (1100 Days), a close ended capital protection oriented fund. The investment objective of the fund is to seek to protect capital by investing a portion of the portfolio in highest rated debt securities and money market instruments and also provide capital appreciation by investing the balance in equity and equity related securities. The securities would mature on or before the maturity of the fund. The fund would allocate 80% to 100% of assets in debt and money market instruments with low to medium risk profile and up to 20% in equity and equity related securities with medium to high risk profile. The benchmark index for the fund is CRISIL MIP Blended Index. The fund managers are Rajat Chandak, Rahul Goswam, Aditya Pagaria, and Abhishek Pathak (for investments in ADR / GDR and other foreign securities).

 

Birla Sunlife Capital Protection-oriented Fund – Series 20

Opens: April 15, 2014

Closes: April 29, 2014

Birla Sun Life Mutual Fund has launched a new fund named as Birla Sun Life Capital Protection Oriented Fund - Series 20, a close ended capital protection oriented fund. The tenure of the fund is 1094 days from the date of allotment. The investment objective of the fund is to seek capital protection on maturity by investing in fixed income securities maturing on or before the tenure of the fund and seeking capital appreciation by investing in equity and equity related instruments. The fund would allocate 80% to 100% of assets in debt and money market instruments with low to medium risk profile and up to 20% in equity and equity related instruments with high risk profile. Benchmark Index for the fund is CRISIL MIP Blended Index. The fund managers will be Prasad Dhonde and Vineet Maloo.

ICICI Prudential Multiple Yield Fund – Series 6 – Plan E - Regular Plan (G)

Opens: April 21, 2014

Closes: May 5, 2014

ICICI Prudential Mutual Fund has launched a new fund named as ICICI Prudential Multiple Yield Fund - Series 6 - Plan E, a close ended income fund. The tenure of the plan is 1825 days. 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 65% to 95% of assets in debt securities (including government securities) with low to medium risk profile. It will allocate up to 30% of assets in money market instruments, cash and cash equivalents with low to medium risk profile and it will allocate 5% to 35% of the asset in equity or equity related securities with medium to high risk profile. Of the investments in debt instruments, 72% to 77% will be invested in AA rated non convertible debentures. The benchmark index for the fund will be Crisil MIP Blended Index. Rahul Goswami and Aditya Pagaria will jointly manage the debt portion of investments under the fund. The equity portion will be managed by Rajat Chandak. The investments under the ADRs/GDRs and other foreign securities will be managed by Abhishek Pathak.

LIC Nomura Capital Protection-oriented Fund – Series 3 - Regular Plan (G)

Opens: April 21, 2014

Closes: May 5, 2014

LIC Nomura Mutual Fund launched a capital protection-oriented fund - Series 3, a three-year close-ended fund. The fund seeks to achieve capital protection by investing in fixed income securities maturing on or before the tenure of the fund and seeks capital appreciation by investing in equity and equity related instruments. The fund, which is designed for investors seeking capital protection, will invest 85% of the corpus in debt and the rest in equity. This will help investors earn regular income over the medium to long-term. The fund will be managed by Y. D. Prasanna and Sachin Relekar.

Sundaram World Brand Fund Series I to III, Reliance Capital Protection-oriented Fund (Plan A-Plan F), Canara Robeco Global Consumer Trends, JP Morgan India Monthly Income Fund, Axis Child Plan, DWS Arbitrage Fund, IDBI Banking and PSU Fund, Sundaram Hybrid Fund – Series (K-O), ICICI Prudential Multiple Yield Fund – Series 7, Sundaram Select Microcap Series V to VII, and DWS Midcap Fund are expected to be launched in the coming months.