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Nilanjan Dey

Kolkata, Sept. 21 JM Mutual Fund has lined up an equity oriented scheme, one that will adopt a blend of strategies so as to provide optimum returns to unit holders.

The proposed JM Multi Strategy Fund, to be benchmarked against the BSE 500, will invest in a mix of equity and equity related securities as well as derivatives and fixed-income instruments.

In normal circumstances, equity and equity related securities will draw an allocation of at least 65 per cent. This can be scaled up to 100 per cent. Up to 35 per cent can be invested in debt and money market instruments.

For investments less than Rs 5 crore, an entry load of 2.25 per cent will be charged, while such investments will carry an exit load of 1 per cent if redemptions are taken within six months of allotment. In case of investments of more than Rs 5 crore, there will be no entry load. These will require an exit load of 0.5 per cent if units are redeemed within six months.

Depending on the prevailing market conditions, the fund will either adopt the growth or the value approach, the offer document filed with SEBI has said. “During benign market conditions, the scheme will act like an aggressive growth fund with a concentrated portfolio of, say, 30-35 stocks with a targeted portfolio beta of greater than 1, whereas in a bearish market the scheme will have a low volatility, conservative portfolio of larger number of stocks in the range of 50 to 60 stocks with a targeted portfolio beta of less than 1,” it is stated.

It has further added that there may be “aggressive cash calls” when the view of the markets is negative. The fund manager may regularly churn the portfolio with a view to achieve the investment objective. The portfolio turnover ratio may, therefore, be high.

Tata MF files for ETF

Adding to the growing list of exchange traded funds (ETF)being launched is Tata MF, which has filed for ETF based on the main banking index. Benchmark MF, which specialises in these products, has pioneered the concept in India. Its latest ETF is based on the infrastructure index.

The Tata offer document is among the several new proposals that fund houses have sent to the regulator. These include interval funds (proposed by Birla Sunlife, Lotus and LIC), small cap funds (HSBC) and tax-planning funds (AIG).

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