New Delhi, Nov 17: Kothari Pioneer Asset Management Company has launched its open-end balanced fund. The initial issue, which opened for subscription on November 15, will close on December 10. The fund will open for fresh sale and redemption of units from January 17, 2000. This is the fourth balanced fund to hit the market in less than two months. The three balanced funds from Birla, Kotak and Prudential-ICICI have mobilised over Rs 600 crore. The balanced fund from Kothari Pioneer will have a 60 per cent allocation to equities, while the rest will be in debt instruments such as AAA bonds and government securities.``The balanced fund is ideal for investors who seek a good blend of growth of capital that comes from equities and the downside protection that comes from fixed income investments,'' said Vivek Reddy, CEO, Kothari Pioneer. ``We are pretty comfortable with the current level of the equity markets and believe that it is the right time for investors to enter,'' added Reddy.
According to the fund manager of the balanced fund, R Sukumar, the fund will emphasise on quality in stock selection and confine the debt exposure to gilts and AAA instruments. ``Our equity investments will be in sound businesses with a low risk profile, with a 5 per cent internal limit on any stock,'' he elaborated. The minimum investment in the balanced fund has been pegged at Rs 5,000. The fund has a choice of growth and dividend plans with an option to re-invest the dividend. Since the fund will invest more than 50 per cent of its corpus in equity instruments, dividend will be tax-free at the hands of investors.
Kothari Pioneer officials are confident of a good response to the balanced fund despite a fall in the markets and three balanced funds recently mobilising money through initial offers.
``We have an excellent track record and proven fund management expertise in equity funds. Besides, all our funds have delivered decent returns. Hence, investors will be confident that investments are being managed carefully,'' Reddy pointed out. Kothari Pioneer currently manages 23 funds including three sectoral funds dedicated to FMCG, IT and pharma sector. The balanced fund will take the tally to 24.
``Balanced fund was the only fund missing in our product category and now, our fund family is complete. However, we may launch a gilt fund in the near future for investors who want to invest in securities with zero credit risk,'' said Reddy.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.