The Hindu Business Line : Principal PNB floats junior cap fund

PRINCIPAL PNB Mutual Fund has launched a new scheme called Principal Junior Cap Fund. The fund offering is from May 12 to June 8. It is an open-ended diversified equity fund.

This fund will invest 51 per cent of its portfolio in stocks that are part of the CNX Nifty Junior Index and 49 per cent in mid-cap stocks or stocks that have less than Rs 2,000 crore market cap.

It offers two investment options of growth and dividend. The minimum application amount for both options is Rs 5,000. During the initial offer period, the units are being offered at par, Rs 10, with no entry load. On an ongoing basis after the fund re-opens fresh investments will attract an entry load of 2.25 per cent. There is an exit load of two per cent for investments less than Rs 3 crore, up to six months.

The fund also offers a Systematic Investment Plan (SIP) option, by which investors can invest a minimum of Rs 1,000.

Mr Shyam Bhat, Assistant Vice-President, Investments, Principal PNB, said the advantage of this fund is that it will be lower in risk than a mid-cap fund, but higher in risk than a diversified fund.

Mr Sanjay Sachdev, Managing Director and CEO, Principal PNB said, "This fund is keeping in line with our conservative approach. We are offering a blended product that will identify the relatively less researched and under owned large caps along with stable mid-caps."

Principal PNB is also looking to reach out to 75,000 new investors, with this new fund, Mr Sachdev added. The fund house has attracted 3,60,000 investors over the last three years. "Our focus is on increasing our customer base, not our assets, because customers bring assets," he said.

Speaking about the investment policy, Mr Rajat Jain, Investment Officer, Principal PNB, said that the fund will invest in about 40 companies and will not invest in companies that have a market cap of less than Rs 400 crore.

"We follow the bottom-up approach and look at the stocks first. We also look at such companies where the management is honest and there are no surprises," he said. There are no sector biases for investing, he added.

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