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Pru ICICI Blended Plan


Prudential ICICI Asset Management Company is launching Prudential ICICI Blended Plan, an open-ended fund that would use the spot-future arbitrage opportunity in the equity and equity derivative markets to generate efficient risk-adjusted returns for investors. Sounds too complex, isn't it? Here's what the fund intends to do: it would look for profits by dabbling in stocks and the future contract of these very stocks. The fund blends an allocation comprising short-term debt and equity arbitrage positions, with an objective to offer the investor returns in the form of accrual income from the debt allocation and cost of carry from arbitrage positions. The fund's IPO begins on April 28, 2005, and would continue till May 18, 2005. The fund offers two plans--A and B. Plan A will seek to maintain 50 per cent allocation in fully hedged equity, up to 49 per cent in money market securities and a small percentage in equity, adequate to cover the 51 per cent required exposure. Plan B, on the other hand, will invest between 51 to 100 per cent in money market instruments and the balance in fully hedged equity. The scheme calls for a minimum investment of Rs 5,000 under both the plans. The scheme will be available for subscription after the closure of the IPO on an ongoing basis during business days falling between 17th and 22nd of every month. The fund charges an exit load of 0.50 per cent on exits within 30 days from the date of allotment. Under both plans, investors have a choice between growth and dividend options. Recently, JM Financial Mutual Fund launched a similar fund by the name of JM Equity and Derivative Fund. During the IPO, the fund had collected Rs 850 crore.