Financial Daily from THE HINDU group of publications
Wednesday, Sep 14, 2005
Financial Daily from THE HINDU group of publications Wednesday, Sep 14, 2005 |
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Markets
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Mutual Funds Deutsche MF to launch close-ended scheme — Infrastructure fund too on the cards Our Bureau
Kolkata , Sept 13 DEUTSCHE MF has lined up a close-ended balanced scheme with a maturity period of three years and without any guaranteed returns. The proposed Deutsche Stable Growth Fund will offer two classes of units, A and B, each to be listed separately. Class A unit holders will get a specific participation rate (30 per cent) in the return of equity and will be given priority over Class B units for distribution at the time of maturity. In other words, a Class A holder will receive 30 per cent of the Sensex returns on maturity. If the index is at, say, 7,200 on the date of allotment and settles down at 10,800 on the date of maturity, a Class A investor will get 30 per cent of the 50 per cent appreciation. Interestingly, such a unit holder will get an additional 10 per cent of the face value, if and only if the Sensex (on maturity) closes more than or equal to the index on the date of allotment. This will be given effect to in the NAV daily by amortising it over the period of the scheme. An investor will have to apply for a minimum 45 units (and in multiples of 15 units). For Class A investors, there will be a 2 per cent entry load for purchases and switch-ins from other Deutsche schemes (during the NFO) for amounts less than or equal to Rs 2 crore. This will be 1 per cent for higher amounts. For all Class B investors, it will be 1 per cent. The fund will try to secure capital appreciation and provide stability of the principal amount invested. "The equity component will be invested in a manner to replicate the BSE Sensex as far as possible and endeavour to provide capital appreciation over a longer term," the offer document filed with SEBI has mentioned. The debt component will be invested in high quality debt securities maturing in line with the tenure of the fund. This will provide stability of the principal. On maturity, the total amount available for distribution will be the maturity value of the debt securities plus the realisable value of the equity investments. Proposes infrastructure fund: Deutsche MF has worked out an equity fund aimed at investing in the infrastructure sector. The proposed Deutsche Infrastructure Fund will focus on companies that operate in areas such as metals, housing, banking & financial services, cement, steel, energy, telecom and construction. It will have the Sensex as its benchmark; Mr Vinay Kulkarni (who recently moved from UTI MF) has been named fund manager. Under normal circumstances, the scheme will allocate at least 65 per cent of its assets to equities and equity related instruments. This may go up to 100 per cent.
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