Pioneer ITI has launched an Index Fund. An open-end fund it will have two plans which will replicate the portfolio with Nifty and BSE Sensex. This will take the number of passive index trackers to seven. The five existing funds - UTI Master Index, UTI Nifty, Franklin India Index, Franklin India Index Tax and IDBI Principal Index (Nifty) together manage Rs. 565 crore as on July 31, 2001.
Mr. Vivek Reddy, Chief Executive Officer, Pioneer ITI AMC Ltd., said, "The launch of our Index Fund at this time is ideally suited to both seasoned and first time investors, as it allows them to capitalise on the market's attractive valuation levels through a portfolio that's highly liquid, well diversified and has a good representation of market leaders from different sectors. We believe this is a convenient way to buy into the market and investors committing money today should make good returns in the medium to long term."
The fund will provide returns similar to that delivered by the respective indices. It aims to keep the tracking error in the range of + 2% by keeping the expenses as minimum as possible and will consider investing in index derivatives to reduce impact costs.
The initial issue of the scheme was open for investment for one day on August 27, 2001. The scheme is available for subscriptions on an ongoing basis from August 28, 2001. Both BSE Sensex plan and Nifty Plan offer a choice of growth and dividend options. The dividend option also offers reinvestment facility.
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