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Nilanjan Dey

KOLKATA, May 6

TATA Mutual Fund has sought permission from the Securities and Exchange Board of India for an umbrella debt scheme. The proposed Tata Fixed Horizon Fund will have a number of investment options carrying various maturities.

The fund, which will try to provide regular returns by investing mainly in fixed-income securities that will normally mature in line with the maturity of the plans concerned, is said to be suited to investors who have a time horizon of three, six or 12 months.

The offer document lodged with the securities regulator mentions that the fund will have three plans of different maturities — quarterly, half-yearly and yearly. Each plan will have a number of series, which will be launched with prior permission from the Trustees. Each plan is likely to have regular income/bonus and appreciation options.

Also, the plans will be considered as eligible for fresh subscriptions at the time of their introduction in the market. The MF has fixed a higher-than-usual minimum subscription: Rs 45,000 for each plan.

According to Mr Ved Prakash Chaturvedi, CEO of Tata TD Waterhouse AMC, the fund will be flagged off towards the end of the month, subject to regulatory clearance. "It will be positioned as a fixed-maturity product, suitable for investors who wish to avoid the risk of fluctuation," he told Business Line.

The duration of the quarterly plan will be 91 days, while that of its half-yearly and yearly counterparts will be 183 days and 371 days respectively. As for the series, the quarterly plan, say, will have about a dozen of these. The first series may open on June 3 and the second on July 1.

The Fixed Horizon Fund is Tata MF's first major initiative after its association with the TD Bank (Toronto Dominion) group. The latter is now among its sponsors along with Tata Sons and Tata Investment Corporation.

The proposed fund will add to the MF's product portfolio on the debt side, which already has income, gilts and liquid schemes. The last time it had approached SEBI was when it sought to re-launch Ind Shelter Fund, a close-ended tax-saving scheme once managed by Indian Bank MF. The scheme has since been redeemed, Mr Chaturvedi stated.

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