ICICI Prudential Asset Management Company has notified in a press release today that its Target Returns Fund, that was launched on April 15, 2009, has collected more than Rs 800 crore from its new fund offer (NFO) which closed for initial subscription on May 14, 2009.
This is an open ended equity fund investing in companies constituting the BSE 100 index, which is also the benchmark for the fund. By itself, this fund is a normal large-cap fund that is likely to be run with the same competent conservatism that ICICI Pru’s equity funds generally are. However, it incorporates a useful innovation in the form of an automatic trigger option.
(Know more about the fund: Automated Profit Booking)
Last time the industry saw such a high figure-collection in this bear run, incidentally, also from the same fund house, was in May, 2008, when ICICI Pru Focused Equity Fund mopped up close to Rs 600 crore from its NFO. However, these figures are dwarfed by Reliance Natural Resources Fund which closed its offer in January 2008 after having mobilized Rs 5,660 crore. HDFC Mutual Fund's Infrastructure Fund had mobilised Rs 1,720 crore in January 2008 when the markets were still ruling at their peak.
The mutual fund industry’s NFO activity had virtually slowed to a crawl over the last year and the case remained the same for much of the new year. Just eight new equity funds have been launched this year, as compared to 38 new launches in 2008. Since hitting its low, BSE's sensitive index, Sensex has gained 75 per cent. The reinstatement of the UPA government at the center has built up the confidence in business circles and money should start flowing into the equity funds in much greater quantities.