We have three NFOs that are all 36-month close-ended equity schemes that convert into open-ended schemes on maturity - Reliance Long Term Equity, LICMF India Vision Fund and SBI One India Fund. However, this one has a regional twist to it.
The focus is on generating long-term capital appreciation by investing in a diversified basket of stocks focusing on all four regions of India.
The basket of investments would comprise of equity (70-100 per cent), fixed and floating rate debt instruments (0-30 per cent), money market instruments (0- 30 per cent), foreign securities including ADRs and GDRs (0- 20 per cent).
The minimum allocation as a percentage of equity assets to each region (North, South, East, West) would be 15 per cent. The maximum allocation to each region would be 55 per cent.
Companies of a region will refer to those that either have their head quarters, head office, major manufacturing facilities, or major revenue generating activity from that region. The region is a group of states and union territories.
The allocation of equity assets to a region would depend upon a number of factors including economic development, market opportunities, changing regulation, flow of investment/ capital to a region, demographic profile, and political and economic factors specific to a region.
Unlike Reliance Long Term Equity and LICMF India Vision, this fund will not have a strong bias towards small- and mid-cap but will have no market cap bias at all.
As long as it is a close-ended fund, there will be no entry load. There is no fixed exit load but during the close-ended tenure, the units will be redeemed after recovering the balance proportionate unamortised issue expenses.
Once it becomes an open-ended scheme, the entry load will be 2.25 per cent and the exit load nil.
Unit cost during NFO: Rs 10
Type of fund: Close-ended equity
Options: Growth, Dividend reinvestment, Dividend payout
Minimum investment: Rs 5,000
Benchmark: BSE 200
Fund Manager: Sanjay Sinha
Offer opened: November 24, 2006
Offer closes: December 22, 2006