India Infoline receives inprinciple to start MF Company

Leading financial services firm India Infoline has received inprinciple nod from SEBI to start its mutual fund company. “An entry into the mutual funds space is an opportunity for us to continue to expand our offerings under the financial services domain in line with our long-term strategy,” India Infoline executive director R Venkataraman said in a statement on Tuesday. The company has presence in 886 business locations spread over 350 cities across the country.

In the recent past, all the Assets under management have declined significantly on account of the fall in the stock prices and also some amount withdrawal by investors and no new money flowing into the new purchases of Mutual funds.

Higher returns in the short term

As a result of the current global situation, peculiarities in the Indian domestic financial scenario, tightness in the liquidity, call rates (rates at which banks borrow between each other) closed substantially higher at 14.0-14.5 per cent, against the previous close of 11.5-12.5 per cent. The rates touched an intra-day high of 15-15.5 per cent signalling tight liquidity in the market.

As a result of the same, one should try and put short term money in liquid mutual funds as against fixed deposits as the returns are higher even after considering the taxes that one should pay. This squeeze in liquidity is expected to be prevalent for some time to come and hence my advice is to park your excess short term money in Liquid mutual funds and ride the wave of higher returns.

Is your investment in Mutual Funds of DSP Merill Lynch safe ?

On Sept 14th 2008, Bank of America’s announced a planned acquisition of $50 billion. According to a Reuters report, this acquisition would combine the largest U.S. consumer bank with one of the largest U.S. investment banks and the leading retail brokerage force.

But as a result of this, the investors in India are worried about the future of their investments in DSP Merill Funds. Is it safe ?. Will it vanish overnight just like Merill Lynch ?. This article focuses on answering the same

The change in ownership of Merill Lynch has a bearing on the ownership of the asset management company. But investors in the DSP Merrill Lynch fund should not worry till their money is managed efficiently by the same set of people who were managing it earlier. The regulatory framework for mutual funds in India ensures safety of your investment managed by any asset management company.

In 2006, the asset management business of Merrill Lynch (Merrill Lynch Investment Managers) was combined with BlackRock. BlackRock is one of the largest listed asset management companies in the world managing assets in excess of $1.4 trillion.
In line with the realignment of Merrill Lynch's asset management business globally, the 40% stake held by DSP Merrill Lynch Limited in DSP Merrill Lynch Fund Managers Limited, would be transferred to BlackRock. The balance 60% will continue to be held by the DSP Group, through its investment companies.

The Board of Directors of DSP Merrill Lynch Fund Managers Limited has approved this transfer and only regulatory approvals are being awaited. The AMC anticipates the regulatory process to be completed shortly. Consequent to the transfer, DSP Merrill Lynch Fund Managers Limited will be renamed "DSP BlackRock Investment Managers Limited" while DSP Merrill Lynch Mutual Fund will be renamed "DSP BlackRock Mutual Fund ".

Thus the the asset management business of Merrill Lynch was combined with BlackRock way back in 2006. Even if Bank of America did not take over Merill Lynch worldwide, the change in "DSP Merrill Lynch Mutual Fund" to be renamed "DSP BlackRock Mutual Fund" was a foregone conclusion.

Performing Mutual Funds increase asset base

The BSE Sensex is down nearly 14 per cent over one year and the average equity fund has lost 18 per cent of its Net Asset Value. But studies show that mutual fund investors have become savvy and have exited the poorly performing funds and have invested in better performing funds.

In a study done by Business Line Newspaper research, data on assets managed by equity schemes show that equity funds which have handled the market meltdown well over the past year have managed to sharply expand their assets under management.

Twenty four of the 300 open-end equity funds in operation doubled their asset base between August 2007 and August 2008. This includes funds such as Sundaram Select Focus, Kotak Opportunities, Reliance Diversified Power and Reliance Regular Savings Fund, all of which contained declines in their NAV to levels much lower than the Sensex, in a falling stock market. Each of these funds has witnessed substantial fresh inflows over the past one year. It could have been done using SIPs as well other than new subscriptions alone.Even small-sized funds such as DWS Investment Opportunity have seen inflows on the back of a good show.

Expanded base
Some of the already large funds which expanded their asset base were Reliance Diversified Power, which managed Rs 1,790 crore in August 2007 and expanded to Rs 5,080 crore by August 2008, and DSP ML Top 100 Fund, which saw its assets go up from Rs 469 crore to Rs 1,032 crore. Index funds from UTI Mutual Fund and LIC Mutual Fund have also expanded sharply.

In contrast, investors have also been quick to exit equity funds which saw significant NAV erosion during this period. The asset base for funds such as ABN Amro Future Leaders, DBS Chola Contra, Kotak Lifestyle and ICICI Pru Emerging STAR has shrunk by as much as 55-60 per cent, after the funds suffered negative returns of 24 to 38 per cent over the past year. The assets dwindling much more than the funds’ NAV is suggestive of investors pulling out money from these funds.

Thus it is important to invest based on past track record of the fund house, scheme and compare it with the benchmark rather than investing based on advertisements, NFO value of Rs 10 (which is meaningless), poor track record or no track record etc.

Reliance launches Banking ETF

The Reliance AMC has launched a banking ETF (Exchange Traded Fund). The launch comes as a surprise because the AMC already runs the largest actively managed banking mutual fund called Reliance Banking that has an AUM of Rs. 938 crore. Though Reliance Banking as done well with a total return of 41 per cent per annum, the fund has barely managed to beat its benchmark in its 5-year life.

ETFs are like Index funds which trade on the market like shares where customer can buy and sell the bankin index. The Reliance Banking ETF will deliver returns exactly like the banking Index, but minus the expenses. Like any index fund, the fund will have lower expense.

This fund will track the CNX Bank Index, which has 12 liquid and large Indian banking stocks. Since inception, its return has been 27 per cent on an average. As on April 30, 2008, its constituents included -- State Bank of India (27.85 per cent), ICICI Bank (24.3 per cent), HDFC Bank (13.43 per cent), Axis Bank (8.21 per cent), Kotak Mahindra Bank (6.78 per cent), Bank of India (4.47 per cent), Punjab National Bank (4.31 per cent), Bank of Baroda (2.85 per cent), Canara Bank (2.42 per cent), Union Bank of India (2.01 per cent), IDBI (1.88 per cent) and Oriental Bank (1.36 per cent).

The scheme's asset allocation will be 90 per cent in the equities of its Index and rest 10 per cent in other equities or debt instruments.

Similar Funds
This will be the second ETF to track a bank index. The first was Benchmark's Banking BeES, which has delivered 36 per cent return since its launch in May 2004. There are two relatively new ETFs as well, which track the PSU Bank Index - Kotak PSU Bank ETF and PSU Bank BeES.


Scheme Details:
Issue Opening Date : May 12, 2008
Issue Closing Date : May 30, 2008
Fund Category : Exchange Traded Fund
Fund Type : Open-end, Exchange traded
Benchmark : CNX Bank Index
Cost : The fund has 2.25% entry load during NFO. Investors will incur brokerage on sale and purchase after listing of the ETF inline with the brokerage that the broker will normally charge.
Minimum Investment : Rs 5000(During the NFO)

Bharti AXA gets SEBI nod for MF foray

Bharti AXA Investment Managers has received regulatory approval from SEBI to start its mutual fund business in India. The company is a joint venture between Bharti Ventures, AXA Investment Managers (AXA IM) and AXA Asia Pacific Holdings.

AXA IM is one of the largest Europe-based asset managers with $830 billion in assets under management as of end December 2007. Bharti Ventures is part of Bharti Group, with interests in telecom, agri-business, insurance and retail.

Now one will see a flurry of schemes opening up from this company and there will be a flood of NFOs coming up.

Reliance to Launch Quant Mutual Fund

Reliance Capital Asset Management Ltd will convert its index fund into a quant fund with effect from April 18, the firm said in a notice recently. Reliance Index Fund will give way to Reliance Quant Plus Fund that will invest at least 90 per cent of the assets in an actively managed portfolio of 11 to 15 stocks from S&P CNX Nifty index on the basis of a mathematical model. The model will shortlist stocks on the basis of stock price movement and financial/valuation aspects, the fund house said. Those not willing to accept changes can redeem units without paying any exit load from March 18 to April 17, it added. Quant Funds are funds that select the stocks in their portfolio on the basis of quantitative analysis. The fund managers managing these kinds of funds generally design a mathematical method based on which the stocks are taken in their portfolio. The model is developed on the basis of mathematical and statistical parameters. Reliance Mutual says that they have an in-house model which they are developing by looking at various parameters such as valuations, earning sentiments, price, momentum and share holders' value. They would also keep the portfolio's sector weightage in line with the Nifty's sector weight. However, in exceptional case this may be 20 per cent higher or lower. India's only quant fund from Lotus India Asset Management (Refer to Lotus India AGILE Tax Fund) is down more than 25% so far this year. The fund has 11 large cap stocks in its portfolio with about 6 to 10 per cent of holding in each. 97 per cent of its holdings are in large cap stocks. 70 per cent of the portfolio is invested in three sectors which are the Energy Sector, Metal & Metal products and Financial sector

Changes in Entry/Exit Load rules of Mutual Funds

In line with the removal of entry load to an investor who is directly investing in a mutual fund (Read more about it at No More Entry Loan when investing directly), the Securities and Exchange Board of India (SEBI) has asked fund house 'not to charge' entry and exit load on bonus units and units allotted on reinvestment of dividend, with effect from April 1 2008.

An entry load is charged when an investor enters a mutual fund scheme. For redemptions made thereafter, investors are charged an exit load by the fund house. In the case of the dividend reinvestment option, the investor is assigned units for dividend that is re-invested in the scheme.

At times, the fund manager converts earnings from the scheme into units and distributes them as bonus units to the investors. These bonus units are then charged entry load and exit load.

The logical argument made against charging such loads is that it is investor's money that has contributed to the earnings and that investors are not entering the scheme afresh, so charging an entry load does not make any sense.

UTI Long Term Advantage Fund Series II

UTI has come out with a Mutual Fund called "UTI Long Term Advantage Fund Series II" which is a 10-year close-ended Equity Linked Savings Scheme with tax benefit. Upto Rs One lakh invested will give the investor a tax benefit under the Section 80C of the Income tax act. The Investment objective of the scheme is to provide medium to long term capital appreciation along with income tax benefit.

It will endevaour to invest in equities of well managed high quality companies that have the potential to grow at a reasonable rate in the long term. It will also invest in emerging growth companies that are believed by the Asset Management Company to have the potential to offer appreciation potential greater than the growth in the relevant stock market indices, in the long term. It will also aims to build and maintain a diversified portfolio

Asset Allocation
Equity: 80%–100% of the assets
Debt & Money Market Instruments: 0% – 20%

Scheme details
Issue Close Date March 19th
Type of Fund - 10 year close ended

Options - Growth Option and Dividend Option with Payout and Reinvestment
Minimum Amount - Minimum initial investment is Rs.500/- and in multiples of Rs.500/- thereafter with no upper limit. However, as per section 80 C of the Income Tax Act, 1961, the tax benefit will be available only upto a maximum amount of Rs.1,00,000/-
Redemption - Redemption Facility The Scheme will offer redemption / switch-out of units on any business day before the maturity but after the expiry of initial lock-in-period of three years period from the date of allotment at the relevant redemption price.

Entry Load: The scheme, being a close-ended scheme, is not permitted to charge Entry Load.
Exit Load : Nil. In accordance with SEBI (Mutual Funds) Regulation, NFO expenses not exceeding 6% of the amount mobilised, will be charged to the scheme and will be amortised over a period of 10 years. If the investor opts for the redemption before the completion of 10 years proportionate unamortized portion of the NFO expenses outstanding as on the date of the redemption shall be recovered from such investors.
Benchmark - BSE 100

DSP Merill Lynch Natural Resources and New energy Fund

DSP Merill Lynch has come out with a new open ended fund called "DSP Merill Lynch Natural Resources and New energy Fund". The primary investment objective of the Scheme is to seek to generate capital appreciation and provide long term growth opportunities by investing in equity and equity related securities of companies domiciled in India whose predominant economic activity is in the (a) discovery, development, production, or distribution of natural resources, viz., energy, mining etc; (b) alternative energy and energy technology sectors, with emphasis given to renewable energy, automotive and on-site power generation, energy storage and enabling energy technologies. The Scheme will also invest a certain portion of its corpus in the equity and equity related securities of companies domiciled overseas, which are principally engaged in the discovery, development, production or distribution of natural resources and alternative energy and/or the units/shares of Merrill Lynch International Investment Funds – New Energy Fund, Merrill Lynch International Investment Funds – World Energy Fund and similar other overseas mutual fund schemes. The secondary objective is to generate consistent returns by investing in debt and money market securities.

Asset Allocation:
1. Equity and Equity related Securities of companies domiciled in India, and principally engaged in the discovery, development, production or distribution of Natural Resources and Alternative Energy: 65% - 100%;

2. (a) Equity and Equity related Securities of companies domiciled overseas, and principally engaged in the discovery, development, production or distribution of Natural Resources and Alternative Energy (b) Units/Shares of (i) Merrill Lynch International Investment Funds – New Energy Fund (ii) Merrill Lynch International Investment Funds – World Energy Fund and (iii) Similar other overseas mutual fund schemes: 0% - 35%;

3. Debt and Money Market Securities: 0% - 20%

Scheme details
NFO Opens : March 3rd
NFO Closes : March 27th
Type of Fund : Open ended
Minimum Investment : Rs 5000 and subsequently additional purchase is Rs 1000
Options : Growth, Dividend and Dividend investment
Entry Load :
For investments less than Rs 5 Crore : 2.25%
For investments greater than Rs 5 crore : Nil
Exit Load
For holding period less than 6 months : 1%
For holding period between 6 and 12 months : 0.5%
For holding period greater than 12 months :NIL

Note : No entry load on direct applications, i.e. applications not routed through an agent/distributor.
No Entry Load / Exit Load will be charged on investments (including SIP transactions) by Fund of Funds Schemes

Mirae Asset Opportunity Fund

Mirae AMC has launched a open ended equity scheme called "Mirae Asset Opportunity Fund". The investment objective of the scheme is to generate long term capital appreciation by capitalizing on potential investment opportunities through predominantly investing in equities, equity related securities.

Under normal circumstances, the asset allocation pattern of the scheme shall be as under:
Equity and Equity Related Instruments: 65% - 100%
Debt and Money Market Instruments (including Securitised Debt): 0 – 35%

The corpus of the Scheme shall be predominantly invested in equity and equity related securities including convertible debentures,equity warrants, convertible preference shares, equity derivatives etc. in Indian markets. However, due to market conditions, the AMC may invest beyond the range set out above. Such deviations shall normally be for a short term purpose only, for defensive considerations and the intention being at all times to protect the interests of the Unit Holders.

Scheme Details
Issues opens: February 11, 2008
Issue Closes: March 10, 2008
Type: Open-ended, equity scheme
Plan : Growth Option and Dividend Option. Dividend Option shall have the choice of dividend payout, dividend reinvestment and dividend transfer options.
Minimum Investment: Rs. 5,000. Additional amount in multiples of 1 thereafter.
Entry Load: For investments below Rs 5 crores, there will be an entry load o Rs 2.25%.
Exit Load:
For purchase amount less than Rs. 5 Crores
a. Redemption within 6 months from the date of allotment 1.00
b. Redemption between 6 and 12 months from the date of allotment 0.50
Purchase amount greater than Rs. 5 Crores NIL
Benchmark : BSE 200
Recurring expenses : Upto 2.5% per annum which includes marketing, investment management and operational costs.

Liquidity - The Scheme will offer units for purchases/switch-ins and redemptions/switch-outs at NAV based prices on all business days on an ongoing basis. The scheme will re-open for purchases on April 8th.

Reliance Equity Saving Fund Series - I

Reliance AMC has launched out with closed ended Mutual fund "Reliance Equity Saving Fund Series - I" which is 10-year Closed-end Equity Scheme. The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equities along with income tax benefit.

Under normal circumstances, the asset allocation pattern of the scheme shall be as under:
Equity and Equity Related Instruments: 80% - 100%
Debt and Money Market Instruments (including Securitised Debt): 0 – 20%

The scheme may invest in equity shares in foreign companies, ADRs / GDRs and instruments convertible into equity shares of domestic or foreign companies and in derivatives as may be permissible under the guidelines issued by SEBI and RBI. As the scheme is governed by ELSS guidelines, such investment will be made, if the ELSS guidelines permit.

The fund managers will follow an active investment strategy taking defensive / aggressive postures depending on opportunities available at various points of time. Subject to Regulations, the asset allocation pattern indicated above may change from time to time, keeping in view market conditions, opportunities and political & economic factors.

It must be clearly understood that the percentages stated above are only indicative and not absolute and that they can vary substantially depending upon the perception of the AMC, the intention being at all times to seek to protect the interests of the Unitholders. Such changes in the investment pattern will be for short term and defensive considerations. However, such changes at all times will comply with ELSS notifications. The asset allocation pattern will be in line with the rules and guidelines of ELSS notifications also.


Scheme Details
Issue Closes: March 17, 2008
Type: Close-ended, equity scheme
Plan : Dividend Payout Option and Growth Option
Minimum Investment: Rs. 5,00. Additional amount in multiples of 500 thereafter. However, as per section 80 C of the Income Tax Act, 1961, the tax benefit will be available only upto a maximum amount of Rs.1,00,000/-.
Entry Load: Nil as it is a close ended scheme
Exit Load: Nil. However, in accordance with the SEBI (MFs) Regulations, NFO expenses not exceeding 6% of the amount mobilised, will be charged to the scheme and will be amortised over a period of 10 years. If the investor opts for the redemption before the completion of 10 years, proportionate unamortized portion of the NFO expenses outstanding as on the date of the redemption shall be recovered from such investor.
Benchmark : BSE 100
Recurring expenses : 2.5% per annum which includes marketing, investment management and operational costs.

Liquidity - The amount invested in the scheme shall be subject to a lock-in of 3 years from the date of allotment and thereafter redemption will be available only during the Specified Redemption Period i.e. first five Business Days on a monthly basis at NAV based prices. Eligible investors in Reliance Equity Linked Saving Fund - Series I are entitled to deductions of the amount invested in units of the scheme, subject to a maximum of Rs. 100,000/- under and in terms of Section 80C (2) (xiii) of the Income Tax Act, 1961. The Scheme does not asssure or guarantee any returns.

Switch - in from other schemes in Reliance Equity Linked Saving Fund – Series I, will be available only during NFO and at the applicable load structure from these schemes, if any.

Switch - out: Available only during the Specified Redemption Period after expiry of lock-in-period of 3 years, at the applicable load structure in the respective schemes.

Birla Sun Life Pure Value Fund

Birla AMC has launched a Mutual fund "Birla Sun Life Pure Value Fund" which is a 3-year Closed-end Equity Scheme with an Automatic Conversion into an Open-Ended Scheme upon Maturity. Birla Sun Life Pure Value Fund seeks to generate consistent longterm capital appreciation by investing predominantly in equity and equity related securities by following value investing strategy.

Value investing is buying into stocks that are trading for less than their intrinsic value - stocks that the market is undervaluing. Typical value investing strategies include, strategies like

• Buying stocks with a low price to book value,
• Low price to cash flow
• Low price/earning multiple, and high dividend yields
• Asset Replacement
• Dividend Yield higher than the G-Sec yield
• Valuation mismatch due to invisible/under valued assets (Land, Licenses, Brands, Trademarks,
Patents etc.)
• Situations wherein the value of the Company would be unlocked due to
o Mergers and Acquisition activities
o Restructuring
o Recovery potential
o Retained earnings

Key underlying assumption in Value Investing is that markets are inefficient and over a period of time the market will discover and find the right value for the stock.
Value strategy, is a conservative way of investing in Equities. The primary reason is that these stocks are already available at a substantial discount relative to the general market levels. As such the downside in such stocks is relatively lesser.
The value strategy, while being a blend of Top down and Bottoms up, essentially focuses on companies with long track records and excellent managements. As such the probability of these companies to improve their fundamentals with changing business dynamics is relatively strong.

Under normal circumstances, the asset allocation pattern of the scheme shall be as under:
Equity and Equity Related Instruments: 85% - 100%
Debt and Money Market Instruments (including Securitised Debt): 0 – 15%

Scheme Details
Issue Opens: January 17, 2008
Issue Closes: March 1, 2008
Type: close-ended, equity scheme
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 5,000. Additional amount in multiples of 1 thereafter
Entry Load: Nil as it is a close ended scheme
Exit Load: Nil (for all redemptions/switch outs made during the specified redemption period until the scheme remains closed-end).However, investors offering units for repurchase/ switch out during the specified redemption periods before maturity of the scheme/conversion of scheme into open ended scheme will be charged balance proportionate unamortized issue expenses on the applicable NAV
Benchmark : BSE 200
Liquidity : The scheme will offer for redemption/switch-out of units at Monthly Intervals at NAV based prices. The redemption/switch-outs will be available only during the specified redemption period i.e. first five business days of each month after the date of allotment. The NAVs of the scheme will be announced on a weekly basis and on all business days during the specified redemption period.
Initial Issue Expenses: Entry Load collected during the NFO period shall be utilised to meet the NFO expenses. Remainder of the New Fund Offer expenses, if any, shall be borne by the AMC.

Morgan Stanley A.C.E./ACE Fund

Morgan Stanley has launched a Mutual Find after 14 years after they launched their firs fund in India. It is an open ended fund called the ACE (Across Capitalisations Equity) fund whose objective is to generate long-term capital growth from an actively managed portfolio of equity and equity-related securities including equity derivatives.

It proposes to invest the funds as pet the details given below
Equity and Equity Related Instruments: 65% - 100%
Debt and Money Market Instruments (including Securitised Debt): 0 – 35%

Scheme Details
Issue Opens: February 11, 2008
Issue Closes: March 10, 2008
Type: Open-ended, equity scheme
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 5,000. Additional amount in multiples of 1 thereafter
Entry Load: The entry load will be as given belo
For purchases of less than Rs. 5 crore: 2.25%
For purchases of Rs. 5 crore and above: Nil
For purchases in SIPs under salary saving schemes for groups of employees through an arrangement with their employer: Nil
Exit Load: The exit load will be as given below
For purchases of less than Rs. 5 crores:
If redeemed on or before the expiry of 1 year from the date of allotment: 1%
After the expiry of one year from the date of allotment: Nil
For purchases of Rs. 5 crores and above:
If redeemed on or before the expiry of 6 months from the date of allotment: 0.5%, otherwise Nil
Benchmark : BSE 2000
Liquidity - The Scheme will offer Units for Purchase and Redemption at NAV related prices on every Business Day on an on-going basis, commencing not later than 30 days from the closure of the NFO period. The Mutual Fund will endeavour to dispatch the Redemption proceeds within 3 Working Days from the acceptance of the Redemption request.
Initial Issue Expenses: Entry Load collected during the NFO period shall be utilised to meet the NFO expenses. Remainder of the New Fund Offer expenses, if any, shall be borne by the AMC.

ICICI Prudential Fusion Fund Series-III

ICICI has launched a new Mutual fund ICICI Prudential Fusion Fund Series – III which is a close-ended diversified equity Scheme, with a maturity period of 3 years, that
seeks to generate long-term capital appreciation by investing predominantly in equity and equity related instruments of companies across large, mid and small market capitalization.

Two options are available to the investor on the date of maturity viz. Redemption or switch-in to ICICI Prudential Fusion Fund Series-II. Investors who would like to switch-in to ICICI Prudential Fusion Fund Series-II will have to specifically opt for switch-in facility. If the investor does not select any option, then the redemption option will be the default option. The option to redeem/switch will be given in the application form of the Scheme.

It will look at investment opportunities in companies representing all possible levels of market capitalization. Under normal circumstances at least 70% of the funds is proposed to be invest in equity and equity related instruments. The fund would be diversified as this fund proposes to invest in large, mid or small caps fund segments. The fund may move upto 30% in debt securities if risk reward ratio is favorable for such allocation.

Scheme Details
Issue Opens: January 8, 2008
Issue Closes: February 21, 2008
Type: close-ended, equity scheme
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 5,000. Additional amount in multiples of 1 thereafter
Entry Load: No entry load will be charged since the scheme is a close-ended scheme.
Exit Load: No exit load will be charged. However, being a close-ended Scheme, for redemptions made before the maturity date of the Scheme, i.e redemptions made during the repurchase facility period, AMC will redeem the units after recovering the balance proportionate unamortized new fund offer expenses
Benchmark : S & P CNX Nifty
Liquidity - To provide liquidity to investors, the Fund proposes to provide repurchase facility at quarterly intervals on 15th day from end of each quarter.

HSBC Emerging Markets Fund

Joining the bandwagon of AMCs that had recently launched mutual funds targeting investment in equities of foreign countries such as South East Asia, China etc, HSBC has launched a Mutual Fund called HSBC Emerging Markets Fund.

HSBC Emerging Markets Fund (HEMF) is an open-ended scheme seeking to provide long-term capital appreciation. The scheme will invest in units / securities issued by overseas mutual funds or unit trusts which will primarily be in equity and equity related instruments of emerging economies like Brazil, China, Russia, India, etc. The fund may also invest a limited proportion in domestic debt and money market instruments.

80 - 100% Units/securities issued by overseas mutual funds or unit High trusts of emerging markets. Currently HSBC GEM Equity Fund is envisaged to be used for investing in the emerging markets however; HEMF could use any other global fund of HSBC Group to invest in emerging markets.

0 - 20% Domestic Debt, Money Market instruments (including CBLO Medium & reverse repo) and units of domestic mutual funds.

Scheme Details
Issue Opens: January 28, 2008
Issue Closes: February 25, 2008
Type: Open-ended, equity scheme
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 10,000. Additional amount in multiples of 1 thereafter
Entry Load: 2.5% for investments/switch in below Rs 5 crores, otherwise Nil..
Exit Load : 1% for investments below Rs.5 crores, if redeemed/switched out within 1 year from the date of investment, otherwise Nil.
Benchmark : BSE 200 & MSCI Emerging Markets Index
Liquidity : The Units of the Scheme shall be available for subscription at Applicable NAV based prices, subject to prevalent load provisions, if any on every business day not later than 30 days after the close of the New Fund Offer Period.

HSBC Small Cap Fund

HSBC has launched a Small cap fund. I am unsure how this will take given the recent carnage in the small and mid cap segment.

It's Investment Objective is to provide long-term capital appreciation primarily from a diversified portfolio of equity and equity related instruments of small cap companies. It is a a close-ended equity scheme with automatic conversion into an open-ended equity scheme at the end of 3 years from date of allotment of units
Options.

The definition of a small cap company will be Companies with the market capitalization which is 1) lower than or equal to the market capitalization of the stock in the BSE Small Cap Index with the largest market capitalization and 2) higher than or equal to the market capitalization of the stock in the BSE Small Cap Index with the smallest market capitalization.

Asset Allocation
Equity & equity related instruments of Small Cap Companies: 65 - 100%
Equity & equity related instruments of other than Small Cap Companies: 0-35%
& Money Market Instruments: 0-35%

Scheme Details
Issue Opens: January 19, 2008
Issue Closes: February 3, 2008
Type: Closed-end, equity scheme with automatic conversion to an open ended fund after 3 years
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 10,000. Additional amount in 1000 and in multiples of 1 thereafter
Entry Load: Nil. Upon conversion into an open-ended scheme**: 2.25% for investments/Switch ins below Rs 5 crores, otherwise Nil.
Exit Load : If the investments are redeemed/switched out within: 1 year: 2%; 2 years: 1.5%; 3 years: 1%; otherwise Nil; Upon conversion, Exit: Nil. Balance proportionate unamortised NFO expenses to be recovered in case of exit within close-ended period.
Benchmark : BSE Small Cap Index
Liquidity :During the close-ended period: Units can be redeemed/switched out on the last 3 business days of every month at NAV based prices, subject to provisions of exit load, if any and recovery of balance proportionate unamortised NFO expenses. Upon conversion into an open-ended scheme: Daily redemption available at Repurchase

Lotus India AGILE Tax Fund

Lotus AMC has launched a close ended Mutual fund that is an ELSS scheme. The Lotus India AGILE Tax Fund is India's first ever Quant-based tax-saving fund. This means that the stocks selected by the fund would be solely on the basis of a mathematical model rather than research and company fundamentals, technical analysis or opportunity ahead.

The primary objective of this fund is to generate capital appreciation by investing in a passive portfolio of stocks selected from the industry leaders. The portfolio of the scheme will constitute of stocks which qualify the following conditions.

• The market capitalisation of the stock chosen should not be less than the market capitalisation of the last stock of S&P CNX Nifty.
• The floating stock of the company should not be less than the least floating stock of S&P CNX Nifty.
• The stock should have a price history of at least 1 year before the date of investment.
• The industry represented by the stock should be present in the composition of S&P CNX Nifty

Of all the stocks that meet the above criteria, only the top 11 will be selected for investment. Thereafter, 9 per cent of the total corpus will be invested in each of these stocks and the remaining 1 per cent will be invested in debt and money market instruments.

Scheme Details
Issue Opens: November 15, 2007
Issue Closes: February 15, 2008
Fund Category: Equity Tax Planning
Type: Closed-end tax saving scheme
Initial Issue Expense: A maximum of 6% of the amount raised
Benchmark Index: S&P CNX Nifty
Minimum Investment: Rs. 500
Liquidity: After the lock-in period of 3 years from the date of allotment, the scheme will offer redemption or switch-out of units at monthly intervals at NAV based prices.

This model of portfolio management is a very new concept in India and there is only one fund of this model that was launched by Lotus AMC in November 2007. But its very design could mean that it could be a roaring success or a complete disaster. Investors who have a good risk appetite and is willing to experiment with a uniqe form of investment and diversification should invest in this while the not so convinced folks should prefer any good open-end tax saving fund with a proven track record over this fund.

Lotus India Mid N Small Cap Fund

Lotus Mutual Fund has launched a mutual fund called "Lotus India Mid N Small Cap Fund" which is 3 year close ended equity scheme that seeks provide long term capital appreciation by investing in a portfolio that is predominantly constituted of equity and equity related instruments of mid and small -cap companies.

The fund proposes to invest between 65% and 100% of the fund proceeds into Equity & Equity Related instruments of mid@ cap companies.

The fund proposes to invest between 5% and 40% of the fund proceeds into Equity & Equity Related instruments of small cap companies.

The fund proposes to invest between 0% and 30% of the fund proceeds into Equity & Equity Related instruments of companies other than the above.

The fund proposes to invest between 0% and 30% of the fund proceeds into Debt and Money Market Instruments.

Scheme Details

Issue Opens: January 07, 2008
Issue Closes: February 15, 2008

Type: Close ended equity scheme
Plan : Dividend Option,Growth Option. Dividend Option (with Payout Facility and reinvestment).

Minimum Investment: Rs. 5,000 and multiples of Rs 1
Minimum Amount for Redemption : Rs.1000/- or 100 units*

Entry Load: Nil
Exit Load: Nil, but, on redemption before maturity of the scheme, investors will be charged balance proportionate unamoritzed issue expenses on the applicable NAV.

Benchmark Index: CNX MIDCAP Index

AIG Infrastructure and Economic Reform Fund

AIG Mutual Fund has launched a mutual fund called "AIG Infrastructure and Economic Reform Fund" which is an open-ended equity scheme that seeks to generate long-term capital appreciation by investing in companies that may benefit from potential investments in infrastructure and unfolding economic reforms without having any bias towards any sector or market capitalization range.

Under normal market conditions and depending on the fund manager's views, the assets of the Scheme would be invested across stocks that represent a broad range of sectors of the economy as mentioned below in order to ensure adequate portfolio diversification:

Infrastructure: Infrastructure companies operating in but not limited to power, oil and gas, telecom, water, housing, real estate, construction, roads, ports, airports, shipping & shipping building, logistics, etc. and sectors that will benefit from the development in infrastructure such as but not limited to cement, metals, capital goods and banking and financial services.

Economic reform oriented: Companies in sectors that will benefit from the on-going liberalization in the Indian economy including relaxation in foreign exchange controls, FDI in banking and financial services and any other industry or sector where there is a trend to moving toward a freer market based model like retail, media and entertainment, mining, etc.

The fund proposes to invest at least 65 per cent of the fund proceeds into Indian equities but under normal circumstances they will invest between 80% - 100% in equities. It has an option to invest upto a maximum of 35% in Debt Securities and Money Market Instruments and Fixed Income Derivative and in normal circumstances, they will invest between 0% - 20% in debt securities.


Scheme Details

Issue Opens: January 10, 2008
Issue Closes: January 31, 2008
Ongoing Offer: February 29, 2008

Type: Open ended equity scheme
Plan : Dividend Option,Growth Option. Dividend Option (with Payout Facility and reinvestment).
Minimum Investment: Rs. 5,000
Entry Load: 2.25% if the investment amount is less than 5 crores. In case of investment through SIP, it will be 1.25%.

Exit Load: If redemption happens before 1 year and the investment amount is less than 5 crores, then there will be an exit load of 1%.

The AMC will disclose details of the portfolio of the Scheme every 6 months by either sending a complete statement to all the Unit Holders or by publishing such statement, by way of advertisement, in two daily newspapers. The same shall also be displayed on the website of the fund.