The Hindu Business Line : FT India launches `fixed tenure' close-ended fund

"It is a close-ended fund that seeks to provide investors steady returns along with capital appreciation through equity exposure," the company said in a statement here.

Mr Sukumar Rajah, Director and CIO (Equity), said: "The traditional fixed income investment avenues available for Indian investors have been giving lower returns due to the low interest rate regime.

At the same time, the volatility in the debt markets has resulted in investors looking for investment avenues that can deliver reasonable returns over the long term. "Keeping in mind this need, we are launching the fourth fund under the FTFTF series".

The new scheme will be a "unique product" that blends stability of fixed income instruments with the potential of equities, and is ideal for investors who are looking for competitive returns as well as cope with rising inflation, he said.

On the investment strategy of the fund, he said, it would invest at least 70 per cent in debt instruments that are maturing in line with the duration of the fund, which will help in reducing interest rate risk. The balance 30 per cent will be invested in equities, which will be managed "in line with Franklin Templeton's disciplined, time-tested and process driven investment philosophy".

Mr Sandeep Singh, National Sales Head, said in addition to the potential for capital appreciation, investors in this fund can also avail of tax benefits through indexation. The fund is also suitable for NRI investors who are looking for an attractive long-term investment avenue to park their IMD proceeds and also those who have been traditionally investing in RBI Relief bonds, he said.

The new fund offer period will be from January 12 to February 10 and the allotment date will be March 3.

Franklin Templeton is one of the largest private sector fund houses in the country with over Rs 16,656 crore of assets under management and an investor base of close to 11,00,000 (as of December 31, 2005).