DBS Chola Mutual Fund has come out with a new scheme, the DBS Chola Hedged Equity Fund. It is an open-ended equity scheme that seeks to generate long-term capital appreciation with low volatility. For this purpose the fund intends investing in equity and derivative instruments. The fund seeks to minimise risk by use of hedging index and stock derivative instruments.
The fund aims to build a portfolio of securities that is style and sector neutral and that consistently outperforms traditional strategies that focus on a single style, such as value or growth. A minimum of 65 per cent of the assets will be allocated to equity and equity related instruments including derivatives, while debt and money market instruments will comprise of 0-35 per cent of the portfolio.
The portfolio of the scheme will be disclosed on a semi- annual basis. As per SEBI regulations the fund can invest a maximum of 50 per cent of its net assets in derivative instruments.
Unit cost during NFO: Rs 10
Type of fund: Open-ended
Options: Growth, Dividend payout, Reinvestment
Minimum investment: Rs 5000
Benchmark: S&P CNX Nifty
Fund Manager: R. Rajagopal
Entry Load: 2.5 per cent
Exit Load: 0.5 per cent if redeemed within 6 months
Offer opened: March 1, 2007
Offer closes: March 23, 2007