Our Bureau

Kolkata, March 3

Two fund houses, Kotak Mahindra and Canbank, have mooted open-ended equity schemes that will invest across the multi-cap spectrum.

Offer documents named Kotak Multicap and CanMulticap have been sent to SEBI for approval.

The Kotak fund, to be managed by Mr Nitin Jain, will be benchmarked against the S&P CNX 500 index. It is expected to invest a minimum 65 per cent in equities. CanMulticap, with Mr K. Umesh Kamath as the fund manager, will have the BSE 100 as its benchmark.

Here, at least 85 per cent is likely to be allocated to equities.

Kotak Multicap, according to the offer document , will use bottom-up stock picking for investing in a range of sectors.

The plan is to select stocks that are priced at a material discount to their intrinsic value. Such intrinsic value will be a function of both past performance and future growth prospects, it is pointed out.

The fund, with a view to preserve capital in bearish market conditions, will be free to invest in debt or money market instruments up to 35 per cent of the portfolio.

CanMulticap will focus on fundamentally strong companies with scope for good growth over time. The fund will aim at reducing risk through adequate diversification of the portfolio. This will be achieved by spreading the investments over a diverse range of sectors.

This, incidentally, is the first offer document to be filed by Canbank MF after Mr B. Sukumaran took over as the MD of the asset management company.

(This article was published in the Business Line print edition dated March 4, 2006)
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