The Hindu Business Line : DBS Chola MF launches hedged equity fund

ON THE HEDGE: Mr Rajnish Narula, Chief Executive, DBS Chola Mutual Fund, at a press conference to announce the launch of its open-ended fund DBS Chola Hedged Equity Fund in Mumbai on Tuesday. - Paul Noronha

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Mumbai Feb 27 DBS Chola Mutual Fund has launched an open-ended fund called DBS Chola Hedged Equity Fund.

The fund seeks to generate long-term capital appreciation by investing in equity, equity-related and derivative instruments and minimise risk by use of hedging tools such as index and stock derivative instruments.

It aims to generate returns with lower volatility.

The new fund offer opens on March 1 and closes on March 23.

"The fund would use an active hedging strategy to reduce the effect of market swings on the fund's long-term performance resulting in more consistent returns with lower volatility," said Mr Rajnish Narula, Chief Executive, DBS Chola Mutual Fund. The investment universe for the fund will constitute all stocks on the NSE where futures and options trading is allowed.

The fund will invest 65-100 per cent of its corpus in equities and equity-related instruments and 0-35 per cent in debt and money market instruments.

The scheme will offer cumulative and dividend options.

The minimum application amount is Rs 5,000. Investors can also participate in the fund through the SIP route.

For investments below Rs 1 crore, an entry load of 2.5 per cent will be applicable, while no entry load will be applicable on investments above that amount.

The fund has been benchmarked against the S&P CNX Nifty index.