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Tata Equity Management Fund


Tata Mutual Fund has launched a diversified equity fund. Named as Tata Equity Management Fund, it will be an 18-month close-ended fund which will get converted into an open-ended scheme upon the expiry of the said duration. The fund will remain open for subscription from May 15 to June 9, 2006.

The fund will invest in derivative instruments to hedge the equity portfolio, and the extent to which the portfolio will be hedged will be based upon the P/E ratio of S&P CNX Nifty, as indicated in the following table.


PE ratio of Nifty Max hedge (% of equity)
Up to 14 10-20
14-18 20-25
18-22 25-50
22-26 50-70
26-30 70-90
Above 30 90-100

As per the stated asset allocation, the fund will invest 65-100 per cent of its assets in equities, while it can also invest up to 35 per cent of its assets in debt and money market instruments.

The fund will provide exit facility during close ended period on a weekly interval subject to an early exit charge. Therefore, it is more of an interval fund rather than a close-ended fund.