The Hindu Business Line : StanChart Mutual launches Enterprise Equity Fund

Standard Chartered Mutual Fund (SCMF) has launched the `Enterprise Equity Fund', to invest in IPOs on NSE. It is a three-year close-ended equity fund that will be converted into an open-ended fund on completion of three years. The NFO opened on April 19 and will close on May 16. The fund is for a minimum subscription of Rs 5,000.

"Many Indian companies, both public and private, are slated to seek funds from the markets in the next two to three years," said Mr Naval Bir Kumar, MD, Standard Chartered AMC.

More than 200 companies are slated for listing in the next couple of years. Retail investors are often not able to access more than one stock at a time, but with this fund, they will be exposed to more than one IPO at a time, he said.

Also there is no need for a demat or broking account and it does not require multiple filling of forms.

Over the last couple of years, though the actively managed funds have been out-performing the index, it is becoming difficult to close the gap further. In 2004, the difference between the two was substantial, with the active funds gaining over the index by 29 per cent; however, in 2006, the level has come down to 10.43 per cent, he said.

The fund will aim to benefit by buying into IPOs that will be launched in the coming years and then even sell the allotment on listing. Mr Kumar, however, insisted that due diligence will be carried while investing and that the fund will not invest in `penny stocks' and IPOs which do not have QIB reservation.

There is no entry load for any amount on Enterprise Equity fund. However, the exit load for redemptions made from the date of allotment to June 30, 2007 will be 3 per cent, from July 1, 2007 to June 30, 2008 will be 2 per cent and from July 1, 2008 to December 31, 2008 will be 1 per cent. The fund will follow the latest SEBI guidelines on issue expenses.

Mr Kenneth Andrade, Fund Manager, Standard Chartered AMC Pvt Ltd, will manage the fund.

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