The Hindu Business Line : LIC MF launches floating rate MIP

LIC Mutual Fund has launched its floating rate monthly income plan fund. This open-ended income scheme's objective is to generate consistent returns, minimise interest rate risk and generate capital appreciation in the long-term by investing in equity and equity-related instruments, according to company officials.

The scheme seeks to take advantage of the prevailing volatility in interest rates by investing in floating rate securities. The additional kicker in returns would be provided by the equity component.

The fund offers two options for investors. Plan A will invest up to 80 per cent in floating rate securities and 20 per cent in equity. Plan B has a 10 per cent cap on equity investments, according to the fund.

LIC Mutual plans to raise Rs 500 crore from the initial public offer of the scheme.

The asset management company is also targeting to grow its assets under management to Rs 6,000 crore by March 2005, according to Mr M.V. Suryanarayana, Chief Executive Officer, LIC Mutual Fund. In order to achieve the target, LIC MF plans to introduce two new funds - Dynamic Equity Fund and Fixed Maturity Plan - shortly.

Mr Suryanarayana added that the company would be increasing the number of distribution agents to 5,000 from the current level of 4,000.

The initial offer of the fund remains open till October 8. There is no entry load for the scheme; exit load of 0.5 per cent would be levied on redemptions within six months from the date of investment for application size up to Rs 25 lakh.