The Hindu Business Line : 5-year close-ended scheme from HDFC Mutual Fund

The proposed HDFC Long Term Equity Fund will allow redemptions and switch-outs on an on-going basis at quarterly intervals at NAV-based prices. This will be possible during what will be called the `Specified Redemption Period' - the first five business days immediately after the end of each calendar quarter.

The scheme, which will not offer any guaranteed return, will provide a dividend re-investment facility only after it is converted at the end of five years.

HDFC Long Term Equity, to be benchmarked against the Nifty, will offer an `automatic trigger facility' on conversion. A unit holder may then opt for withdrawal and switch, based on his unit balance attaining a minimum capital appreciation, events or dates.

Redemption will take place as and when the balance reaches a desired value or after a certain period of time.

The fund manager will try to maintain a diversified portfolio of equities keeping in view the scheme's objective - capital appreciation over the long term. "The aim will be to build a portfolio that adequately reflects a cross-section of the growth areas of the economy from time to time", according to the offer document sent to SEBI. The portfolio will focus chiefly on a buy and hold strategy at most times, it is pointed out.

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