Despite yo-yo mart, AMCs dish out equity schemes

Written by Kavitha Venkatraman | Hyderabad, Jan 25 | Updated: Jan 26 2008, 06:15am hrs
Despite the stock market going on a tail spin, investors are still finding equity mutual funds (MFS) more promising than other investment options. Cashing in on the mood is the asset management companies (AMCs) who are widening their basket of offerings. In the current quarter, the market has seen a slew of new fund offers (NFOs) from AMCs.

Lotus India, for instance, launched its three year close-ended equity scheme, `Lotus India Mid N Small Cap Fund during the first week of January. The investment objective of the scheme was to 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 would have exposure to mid cap stocks in the range of 65% to 100% and in small-cap stocks in the range of 5% - 40%. A portion could also be invested in debt and money-market instruments.

JM Financial MF also introduced its new fund `JM Core 11 Fund-Series I. It is a three-year close-ended equity oriented growth scheme with multiple series. Nearly 65% to 100% of the fund would be invested in equity and equity related instruments with medium to high-risk profile. The fund would also invest to the extent of 35% in money market and debt instruments including securitised debt. Exposure to derivatives would be capped at 50% of equity portfolio of the scheme. In December 2007, the company also launched JM Tax Gain Fund, an open ended equity linked savings scheme. The aim of the fund is to generate long-term capital growth from a diversified and actively managed portfolio of equity and equity relaed instruments and to enable investors a deduction from total income, as permitted under the Income Tax Act, 1961 from time to time. The fund was to invest 80% to 100% in equity and equity related instruments with medium to high-risk profile and upto 20% in money market instruments and debt instruments such as bonds and debentures.

Similarly, AIG Global Investment Group Mutual Fund also launched an open-ended equity scheme AIG Infrastructure and Economic Reform Fund in early January. The fund will invest in companies that are likely to benefit from the increased infrastructure spend during the Eleventh Plan period (2007-08 to 2011-12) and those entities that are likely to be beneficiaries of the reform process unleashed in recent years. The fund would have a portfolio of 40 to 45 stocks.

ICICI Prudential Mutual Fund has come out with its first equity linked fixed maturity plan.

The three-year close-ended Fixed Maturity Plan Series 33 - Plan A would invest up to 80% in equity-linked debentures to provide market-linked returns to investors, while the balance would be allocated towards AA or higher rated debt securities with fixed and floating interest rates.

Some of the other funds which are going to enter the market would include Lotus India Fixed Maturity Plan - 3 months-series XXII. The objective of the scheme is to generate income by investing in a portfolio of debt and money market instruments normally maturing in line with the duration of the scheme.