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Fidelity Launches an Equity Fund


Fidelity, one of the world's largest fund houses made its first Indian offering of Fidelity Equity Fund, an open ended equity growth scheme. The fund aims at generating long term capital growth from a diversified portfolio of predominantly equity and equity related securities. The IPO will open from March 21, 2005 and close on April 19, 2005.

The fund house introduced its offering as a fund based on the philosophy of bottom up stock picking. The fund aims at spreading investments across a broad range of successful businesses and will contain a portfolio of about 75 stocks that have a potential to grow in value. Though the fund has no restrictions on individual holdings, the fund manager will rarely allocate more than 4 per cent to one a single stock. Maximum exposure to a single sector would also be capped at 25 per cent of the net assets of the scheme.

The fund calls for a minimum investment of Rs. 5000 for opening a folio, in case of a SIP atleast 6 cheques with a minimum single installment of Rs. 500. Fidelity Equity Fund will offer Systematic Investment Plan (SIP) from launch. In addition, the fund has no entry load on SIP investments where single installments are less than or equal to Rs.1 lakh or Rs.5 crore or more. However, an entry load of 2.25 per cent is charged on SIP installments ranging between Rs. 1 lakh and Rs. 5 crore as well as on lumpsum investments of less than Rs. 5 crore.

In respect of an exit load, the fund charges 1 per cent for redemptions from lumpsum investments held for less than six months. In case of SIP investments a charge of 2 per cent is applicable on redemption made from a SIP investment held for less than two years, provided no entry load was paid at the time of investment.