Prudential ICICI AMC has announced the launch of a diversified equity fund. Called the Discovery Fund it will remain open for subscription from July 9, 2004 to July 23, 2004. The fund intends to invest between 80-100 per cent in equity and equity-related instruments and between 0-20 per cent in cash and money market instruments. The fund has an entry load of 2.25 per cent on investments below Rs 5 crores and nil for investments of Rs 5 crores and above. The fund has no exit load.
Based on the concept of value investing, the Pru ICICI Discovery Fund will invest in fundamentally strong companies that are available at a discount to their fair value. Few important financial parameters that the fund will use for stock picking are P/B & P/E ratio, dividend yield, price to sales ratio, free cash flow and enterprise value to net realisable asset value.