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Canbank to Launch Canincome

Canbank Mutual will soon launch a medium-term bond fund - Canincome. With this, it will nearly complete its range of bond funds barring a short-term gilt and short-term bond fund. This was a significant gap in its product range.

Canbank Mutual Fund will soon launch a medium-term bond fund – Canincome. It will invest 80-100 per cent of the corpus in debt securities and the balance in money market instrument. The fund will have three plans: Growth Plan - with automatic repurchase option, Income Plan and the Bonus Plan. The automatic repurchase option is a smart packaging of the Systemetic Withdrawal Plan (SWP) which is tax efficient without eating into capital. In this option, the fund will redeem the dividend equivalent units as declared under the income option, without any exit load. The provision of Bonus option in a new fund is a novelty. Bonus will be a better way to earn return now, as dividend from funds is no longer tax-free.

Almost every active fund family has its bond fund. In that sense, Canbank is a late entrant with its core debt product. But with this launch, Canbank will nearly complete its range of bond funds barring a short-term gilt and short-term bond fund. This was a significant gap in its product range. Recently, it launched a cash fund Canliquid. And by converting Cancigo into a new open-end fund last year, the AMC got the MIP. While Cangilt (PGS) has emerged as a large medium-term gilt fund with Rs. 297 crore assets.

Canbank currently manages 4 equity funds, 3 balanced funds, 3 debt funds and 3 closed-end Tax-planning schemes (Canpep series) with a total asset base of Rs 768.38 crore, as on March 27, 2002. Although, this corpus is small as compared to other mutual funds, but is gaining momentum with its full range now.