The Hindu Business Line : IL&FS plans equity-based dynamic fund

The Dynamic Fund intends to generate returns by investing primarily in equity and equity-related instruments and, as a defensive strategy arising out of market conditions, the scheme might also invest in debt and money market instruments.

"The Dynamic scheme will predominantly be an equity scheme but will enjoy the flexibility of moving in to debt instruments when the markets are not favourable, to protect the downside for the investors. We have filed the offer document for the scheme with the Securities and Exchange Board of India and are awaiting an approval. Ideally, we are looking to launch the fund by the first week of August," said Mr Dilip Bhatia, Head of Operations and Chief Financial Officer, IL&FS Mutual Fund.

Talking about the benchmark for the scheme's performance, Mr Bhatia said, "The basic idea is to manage it as an equity scheme hence the performance benchmark index will be the S&P CNX Nifty. The fund will be investing in debt market instruments though for a short period of time. In case of a longer investment period in the debt market the benchmark would be the CRISIL Liquid Fund Index."

According to the offer document filed with SEBI, the initial offer price will be Rs 10 per unit with the minimum application amount being Rs 10,000 and in multiples of Re 1 thereafter. Initial issue expenses to be charged to the scheme will be limited to 2.5 per cent of the amount collected and the excess over 2.5 per cent, if any, will be borne by IL&FS Asset Management Company (AMC).

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