The Hindu Business Line : Update

DBS Chola Mutual has launched a three-year close-ended equity theme fund called DBS Chola Infrastructure Fund. The fund will be automatically converted into an open-ended fund after the expiry of three years from the date of allotment.

The scheme will invest in companies engaged in building roads, ports, railways, airports, special economic zones and also in companies in sectors such as telecom, oil and gas power and cement. The fund seeks to adopt both top down and bottom up approach for stock selection. It plans to allocate 65-100 per cent of its assets in equity and 0-35 per cent in debt and money market instruments. S&P CNX Nifty will be the benchmark index for this fund, which will be managed by Mr R. Rajagopal.

The new fund offer (NFO) is open from August 6 to September 7. The minimum investment amount is Rs 5000. There is no entry load during the NFO. The exit load will be 2 per cent if redeemed within 12 months, 1 per cent for redemptions between 12-24 months and 0.5 per cent for exit made between 24-36 months of allotment.

Kotak Gold ETF, an open ended gold fund, listed on the NSE on August 8 and opened at a price of Rs 919 and closed at Rs 892.1 for the day. The fund proposes to invest in gold, engage in gold lending, deposit gold with banks in return f or fees to the extent permitted by regulators. The asset base of the fund is Rs 40-42 crore.

Sundaram BNP Paribas Mutual’s asset under management has cross the Rs 10,000 crore mark. As of July 31 2007, the fund house’s asset size stood at Rs 10,638 crore. The fund is also continuing its series of new launches. It h as filed papers with the SEBI for launching two close-ended funds that will invest in the entertainment sector and the energy sector respectively.

A committee appointed by SEBI has suggested that dedicated infrastructure funds by mutual funds should be close-ended schemes with a minimum maturity period of seven years with majority investments in unlisted companies. The investment s could be a combination of debt and equity. Considering the long term and close-ended nature of the scheme the committee has recommended tax benefits such as deduction under Section 80C and exemption of long-term capital gains.

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