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Banking on value
The deep pocket of opportunity in cyclical themes such as banking and engineering that currently trade at a steep discount possibly prompted ICICI Prudential Mutual Fund to launch its Value Fund Series 3. A pick-up in the economy may lead to a re-rating of these themes. If you are betting on a recovery, this fund may be a good vehicle to play this opportunity. The fund's mandate suggests that it will identify and invest in companies that currently trade at a discount to their true value. Being a closed-end fund, you will have to stay invested in the fund for atleast three years. The fund will be managed by Chintan Haria and Sankaran Naren, and will be open for subscription up to March 14.
StAR platform for MFs
BSE launched its revamped StAR MF platform last week. This platform allows distributors and advisors to directly buy and sell units on the exchange, an improvement over the platform launched in 2009, wherein one had to go through only registered stock brokers to buy or sell units. Systematic investment facility has also been made available to investors. The fund units will be directly credited and debited to investors’ demat account, enabling them to access all MF investments at one go.
‘Double’ benefit
With the fiscal year about to end and interest rates seeming close to the peak, it may be an opportune time to lock in to fixed term plans (FTPs). Besides attractive yields and likely price gains on interest rate cuts in future, you get the double indexation benefit by investing in FTPs that mature in or beyond April 2015. If you invest now in a fund that matures in April 2015 (FY16), you can claim indexation benefit over two years. Indexation adjusts your investment for inflation and this helps you save on capital gains tax. The benefit can be significant during inflationary times. The Income Tax department announces the cost of inflation index (CII) every fiscal. Currently eight FTPs maturing in April 2015 (FY16) are open for subscription. This includes IDFC FTP Series 84, UTI Fixed Term Income Series XVIII-I, DSPBR FMP Series 154 12.5 Months and Sundaram FTP FG.
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