The SEBI has given a go-ahead to Alliance Capital Mutual Fund to launch its Alliance Frontline Equity Fund (AFEF). The AMC known for its aggressive style already runs the largest private sector equity diversified fund, Alliance Equity (assets: Rs 483.66 crore as on June 30, 2002).
Unlike index funds, which track a chosen index, this fund will target only the sectoral weights of the BSE 200 -- the benchmark index. This scheme will have the flexibility of selecting stocks within a particular sector from a wider investment universe. The portfolio will attain the sectoral diversification of the index on the designated day every month, by aggregating market values of individual stocks sectorwise, as a percentage of the total market value of the equity component in the scheme's portfolio. The BSE 200 is a broad-based index, which comprises of companies from emerging industries, covering 21 sectors.
The minimum investment for the scheme is pegged at Rs 5,000 with an entry load of 2%, with no exit load. However, Alliance Capital is yet to decide the launch date of the scheme.