Birla Sun Life Mutual Fund has announced the launch of a new fund offer (NFO), in the form of the Birla Sun Life Capital Protection Oriented Fund – Series 1. This is a close ended fund.
The fund house is offering protection to investors capital by taking a position in high quality debt securities, but is also eyeing a capital appreciation kicker in terms of equity exposure to lift gains further.
The fund would invest in fixes securities which would match with the time-line of its tenure, which is 27 months from the date of allotment. While it can invest up to 100 per cent in debt securities and money market instruments, it would also look for an up to 20 per cent exposure in equity and equity-related instruments.
A passive investment strategy will be followed for the fixed income component after evaluating and researching domestic and foreign financial markets.
On the equity front, the fund intends to invest primarily in diversified equity and equity-related securities of the companies that have a potential to appreciate in the long run –those having strong fundamentals and backgrounds. In short, low-risk equity investment has been strategised.
The fund would be managed by Satyabrata Mohanty, B.Com, C.A and CFA. He has over 10 years' experience in finance and research. Previously, he has worked with the Aditya Birla Management Coporation. He already manages seven other schemes of the fund house.
The fund would be benchmarked against CRISIL MIP Blended Index. The NFO offers only a growth option and therefore, no dividends will be declared. The income attributable to units under this option will continue to remain invested and will be reflected in the net asset value (NAV) of the units.
The fund allows investors to switch their investments from any other open- and close-ended schemes launched prior to December 12, 2008 subject to completion of lock-in period.
Since this is a close-ended scheme, investors can subscribe to the units during the NFO period only and the scheme will not reopen for subscriptions after the closure of the NFO.
There will be no exit load. No redemption/repurchase of units is allowed prior to the maturity of the scheme and those investors wishing to exit may do so through stock exchange.
The price of units of the scheme will be Rs 10 per unit.
The minimum application amount is Rs 5,000 and in multiples of Rs 10 thereafter.
The NFO opened on February 5, 2010 and will close on March 5, 2010.
The minimum subscription (target) amount under the scheme is pegged at Rs 10,00,00,000 during the NFO period.
