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Our Bureau

To be effective from September 22

Kolkata , Sept. 19

Mutual funds are increasingly permitting foreign financial institutions to invest in select products without payment of loads. HDFC Mutual is the latest to waive entry or exit loads for FIIs in half a dozen equity funds.

The fund house, among the largest asset management companies in India at the moment, has announced it will not charge loads on investments made by FIIs and their sub-accounts in HDFC Equity, HDFC Top 200, HDFC Capital Builder, HDFC Growth, HDFC Premier Multi-Cap and HDFC Core & Satellite.

Most of the six funds in question are fairly large in size. Some like HDFC Capital Builder and HDFC Top 200 are older while HDFC Core & Satellite and HDFC Premier Multi-Cap are of more recent origin.

The no-load provision would be effective from September 22, the MF has stated.

Its decision comes shortly after Franklin Templeton (FT), yet another big player in terms of assets under management, announced a waiver for FIIs for investments in Franklin India Prima Plus Fund.

A recent FT announcement attributed the move to the relatively low distribution and marketing costs associated with FIIs and their sub-accounts. Such costs are typically incurred on brokerage and sales promotion.

The FT decision came into effect from September 19. While all prior investments will still be subject to the load structure (at the time of their original investments), the trustees will reserve the right to revise the latest decision or introduce a load in future on a prospective basis. This will be subject to limitations placed by the SEBI, the fund house pointed out.

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