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WITH the stock market bullish, mutual funds have been adopting a range of strategies to lure investors. Quite a few funds, such as Canbank Mutual, BoB Mutual, IL & FS Mutual Fund and Tata Mutual Fund, have launched new schemes covering both debt and equity markets. More popular now is the practice of fixed record dates for dividends and using it as a bait to lure investors. Franklin Templeton and HDFC Mutual Fund — two funds that score high on investment performance — are no exception. Rather, they have been at the forefront with Templeton now fixing September 16 as the record date for dividend in Templeton India Growth Fund.

Of greater concern is the practice of waiving loads for investments in excess of Rs 10 lakh or Rs 20 lakh. This is effectively aimed at luring corporate entities and high-net-worth individuals. Such money tends to be volatile and can cause immense damage. If mutual funds need an example, they need look no further than the erstwhile US-64 of the Unit Trust of India. The trends clearly show that in a bullish market, mutual funds resort to a range of strategies to garner funds from investors and tend to miss the better practice of selling themselves on the basis of performance.

New Tata scheme: Tata Mutual Fund has launched Tata Dynamic Bond Fund. After the initial-offering period of two days, the fund re-opened for sale and repurchase from September 3. There are two options — Option A and Option B — and there are two plans in each — Bonus/Income and Growth. The minimum option for Option A is Rs 5,000 and for Option B, Rs 1,00, 000. There is an exit load of 1 per cent for funds pulled out within 365 days. There is no entry load.

HDFC Dividend: HDFC Mutual Fund has announced a dividend of 15 per cent for the HDFC Growth Fund. The record date for dividend entitlement is September 1.

UTI Dividend: UTI Mutual Fund has announced dividends of 14 per cent for Mastershare, 18 per cent for US-92 and 2 per cent for CRTS (targeted at charitable trusts).

Alliance MIP: Alliance Capital Mutual Fund has declared a dividend of 0.8 per cent (Rs 0.08 per unit) for the Monthly Dividend Plan of its Monthly Income Plan. The record date for the dividend is August 29.

Templeton Dividend: Franklin Templeton has fixed September 16 as the record date for the dividend in the Templeton India Growth Fund. There will be a two-day book closure, on September 17 and 18. The fund will open for sale and repurchase on September 19.

Alliance Frontline Dividend: Alliance Capital Mutual Fund has announced a dividend of 10 per cent (Re 1 per unit) for the Alliance Frontline Equity Fund (Dividend Option). The record date for the dividend entitlement is August 29.

New Alliance CEO: Mr Rajnish Narula has joined Alliance Capital Asset Management as its Chief Executive Officer.

New Canbank Schemes: Canbank Mutual Fund has launched two new schemes — Canequity Diversified and Can Short Term Plan. The minimum investment amount is Rs 5,000. There is no exit load. The initial offer period is from September 12. There will be an entry load of 1.85 per cent on an ongoing sale. There is no exit load. There will be an exit load of 1 per cent if funds are withdrawn within 180 days.

New HDFC Scheme: HDFC Mutual Fund has filed with the Securities and Exchange Board of India for a new income scheme, the Regular Income Plan. The scheme will offer a dividend and growth option under the short-term plan. Under the long-term plan, a half-yearly dividend and growth option will be on offer. The fund may invest up to 25 per cent of assets in equities.

Principal Ownership: Punjab National Bank will have a stake of 30 per cent in Principal Mutual Fund. Five per cent will be held by Vijaya Bank. The fund is now a joint venture among Principal, Punjab National Bank and Vijaya Bank.

New Templeton Option: Franklin Templeton is to introduce a Growth Option of Templeton India Growth Fund. The new plan will be termed Templeton India Growth Fund-Growth Plan. The growth plan is available from September 5. There will an entry load of 2 per cent of NAV. There is no exit load.

New Tata Option: Tata Mutual Fund has introduced a Dividend Option for the Tata Pure Equity Fund. This is with effect from September 12. The minimum investment amount is Rs 5,000.

The features and risk factors remain unchanged. Under the existing Growth Option, no dividends will be declared. A dividend is to be declared under the proposed Dividend Option. The record date for this purpose is September 30.

BL Research Bureau

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