IPO Analysis

Religare Launches Two MIPs

One of these will also invest in Gold – a first for an MIP

Religare Mutual Fund has announced the launch of two new funds -- Religare Monthly Income Plan (MIP) Plus and Religare MIP.

Religare MIP Plus is the first such MIP in the mutual fund industry that will allocate its assets in Gold Exchange Traded Funds (ETFs), apart from investing in fixed income and equities. Religare MIP, on the other hand is a traditional MIP.

Religare Monthly Income Plan (MIP) Plus

By allocating its assets to Gold ETFs, the fund will have the flexibility to tilt the allocation made between asset classes so that it is positioned to take full advantage of prevailing market conditions. The fund could allocate up to 90 per cent of its assets in debt or money market instruments, up to 35 per cent in gold ETFs and also invest up to 25 per cent in equities.

This fund is benchmarked against CRISIL MIP Blended Index and Price of Gold.

Saurabh Nanavati, Chief Executive Officer, Religare MF said: “Traditionally, Indian investors have always found comfort with fixed income and gold. Including gold in a traditional MIP provides the retail investor with added convenience of being able to invest in one scheme as compared to investing and tracking three different asset classes. It also brings in distinctly different risk-return characteristics. Gold’s low or inverse correlation with other major asset classes like equity and debt helps to stabilises the risk-return profile during declining financial markets and poor economic climates.”

Though not an MIP, UTI Wealth Builder Series II Retail-G is the only other fund which allocates its assets to debt, equity and gold ETFs.

Religare Monthly Income Plan

Religare Monthly Income Plan  will invest  up to 100 per cent in debt and money market instruments. It can also allocate up to 25 per cent of its assets in equities. The fund has been benchmarked against CRISIL MIP Blended Index.

The New Fund Offer (NFO) period for both the funds is open now and will close on May 11, 2010. The minimum application amount during the NFO for both the funds under the growth option is Rs 5,000 and under the dividend option is Rs 25,000.

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