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Mumbai, Nov. 25 Sundaram BNP Paribas Mutual Fund announced the launch of a PSU Opportunities fund on Wednesday. The investment objective of the open-ended equity scheme would be to seek capital appreciation by investing primarily in the equity and equity-related instruments of PSU companies and the fund is benchmarked against the CNX PSE index. The new fund offer will close on December 23, 2009.

“We are aiming at garnering about Rs 350-400 crore given the current market conditions,” said Mr Sunil Subramaniam,

The PSU theme offers triggers of wealth creation linked to disinvestment valuation re-rating, growth, privatisation and high dividend payouts, said Mr T.P. Raman, Managing Director, Sundaram BNP Paribas AMC.

As the Government’s disinvestment programme progresses, PSUs are likely to become an even larger part of the equity market, said Mr Raman.

The fund will invest a minimum of 65 per cent and a maximum of 100 per cent in equity and equity-related instruments in the PSUs, while a maximum of 35 per cent might be allocated for equity and equity related instruments other than the PSU theme. The fund could allocate a maximum of 35 per cent into fixed income or money market instruments also. The fund has both growth and dividend options. The minimum application amount must be Rs 5,000 and in multiples of Re 1 thereafter. The minimum amount for redemption or switch will be Rs 500 or 50 units.

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