With the government-owned corporations coming under the limelight due to their stronger fundamentals that were not hugely affected even during the worst periods of the global financial crisis, there was bound to be investor interest generated to a high degree. Looking to transform this interest into a money-making opportunity is the Religare Mutual Fund, which has opened for subscription the Religare PSU Equity New Fund Offer (NFO).
This is not only the first fund from Religare MF that will invest in public sector undertakings (PSUs) but the first actively managed fund in the entire MF Industry chasing the same. However, there are other passively managed funds including Kotak PSU Bank ETF, PSU Bank BeES.
The scheme seeks to invest more than 65 per cent of its assets in stocks and related instruments of the constituents of BSE PSU Index. It can also invest up to 35 per cent of its assets in stocks of other PSU companies, fixed income instruments and cash. Apart from this, the fund can also invest up to 20 per cent of its assets in stocks of companies other than PSUs.
The fund has been benchmarked against BSE PSU Index.
Religare Mutual Fund, erstwhile Lotus Mutual Fund, was started in May 2005. The MF has 11 equity funds of different types, largest one being Religare AGILE. Assets under these equity schemes account for about 4 per cent of Rs 14,685 crore, the average assets under management (AAUM) by the fund house in August, 2009. Since all of its equity schemes are less than 3 years old, they are not rated by Value Research.
The fund would be managed by Pradeep Kumar. He is a BE, MMS, CFA Charter holder from CFA Institute, USA. He has more than 11 years experience, including nine years in Indian equity markets. Prior to joining Religare Asset Management Company (AMC), he has worked as Fund Manager-Equity at ABN AMRO AMC. He has also worked with DBS Cholamandalam AMC.
Pranav Gokhale will manage the fund’s overseas investments.
Type: Open Ended Equity scheme
NFO Opens: September 29, 2009
NFO Closes: October 28, 2009
Plan / Options: Growth and Dividend (Payout and Re-investment) options.
Minimum Application Amount: Rs 5,000/-
SIP Investment: Monthly (during NFO: Rs 1,000 x 6; ongoing basis: Rs 500 x 12) and Quarterly (Rs 1,500 x 4)
Minimum Additional Application / Redemption: Rs 1,000/-
Benchmark: BSE PSU Index
Exit Load Structure: 1 per cent if redeemed within one year.
Annual Recurring Expense (maximum): 2.50 per cent per annum (including investment management fees of 1.25 per cent).