The fund aims to invest predominantly in mid and small-cap companies. For this purpose the scheme has defined mid-cap stocks as those with a market capitalisation of less than Rs 3,500 crore on the date of investment. Small-cap stocks have been classified as companies with a market capitalisation of less than Rs 600 crore. The fund has also kept the option of investing in equity and equity-related instruments of unlisted companies in line with SEBI regulations.
This three-year close-ended fund will become open ended at the end of the tenure. The scheme has provided for redemption of units on a half-yearly frequency during the first five business days of the redemption month.
Being a close-ended scheme, there are no entry and exit loads, but upon redemption before the maturity period, investors will have to bear proportionate unamortised new fund offer expenses.
It's a mixed bag for Principal PNB on the performance front. Most of its diversified equity funds have a below-average performance record. Only Principal Large Cap has been able to make it to the top quartile over the last one year. However, the fund house's tax-planning funds are doing quite well. Both of its ELSS funds - Principal Personal Tax Saver and Principal Tax Savings - have outperformed the category in the previous year and are managed by R Srinivasan, who is also the designated fund manager for this latest offering.
Snapshot
Unit cost during NFO: Rs 10
Type of fund: Close-ended
Options: Growth, Dividend payout, Reinvestment
Minimum investment: Rs 5,000
Benchmark: CNX Midcap Index
Fund Manager: R. Srinivasan
Offer opened: January 24, 2007
Offer closes: February 21, 2007
