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Tuesday, Sep 24, 2002

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HSBC Mutual plans new schemes for big investors

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KOLKATA, Sept. 23

HSBC Mutual Fund has lined up an income scheme aimed at institutional investors. The offer document has already been lodged with the Securities and Exchange Board of India for approval.

The proposed scheme will come with two options — short-term plan and investment plan. The latter will cater to investors with medium-to-long term outlook.

The fund will be open only for institutions — corporates, societies, trusts, banks and overseas corporate bodies, among others. The idea is to generate regular returns by investing in a basket of fixed-income securities.

Under normal circumstances, the short-term plan is expected to allocate up to 65 per cent of its corpus to debt and money market instruments with a residual maturity of less than 367 days. This allocation may move up to a maximum level of 80 per cent. Also, up to 35 per cent may be invested in debt instruments with a residual value of more than one year — an allocation that may be increased to 60 per cent if circumstances so warrant.

The scheme, according to the offer document, will try to invest in shorter duration assets in line with the investment objective; investments, therefore, will be chiefly made in the money market.

As for the investment plan, up to 75 per cent and 25 per cent may be put in debt securities and money market instruments, respectively in a routine situation. This may be scaled up to 25 per cent and 60 per cent, respectively according to requirements.

It may be mentioned here that the latest plan from HSBC mutual fund follows the three earlier ones. A few months ago the mutual fund had moved the regulator with three offer documents — equity, income and liquid. The income fund, incidentally, also included similar options: short-term and investment plans.

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