Both the schemes have no entry load while they offer exit option only through listing on the Over-the-Counter Exchange of India (OTCEI). The schemes do not assure any returns and propose to generate returns by investments in a mix of debt instruments, money markets andequities.``Basically, only the duration of the schemes is different. We did a survey in the market and found that there is an appetite for three- and five-year closed-end income schemes. We have different yields for three- and five-year debt papers. Hence, those who want higher returns can lock their investments in the five-year fund,'' says D Ravishankar, Chief Executive, Cholamandalam Cazenove.

Both the schemes are likely to open on February 15. Interestingly, Chola Amity will remain open for initial subscription only for six days. It may be recalled that the last scheme from Cholamandalam, Chola MI '98, was open for only four days and mobilised a whopping Rs 60 crore. Chola HI '99, however, will remain open for a period of one month.

``With a tenure of three years and two months, the fund is likely to picth for investments under section 54EA,'' says a fund analyst. Under section 54EA, the entire income (principal and capital gains) arising from sale of an asset is tax exempt if invested for a period ofthree years.

While Chola Amity has a minimum collection target of mere Rs 10 lakh, the AMC has not set any target for Choal HI '99. ``We are looking at a decent size in both the funds,'' says Ravishankar, although he refuses the quantify the targeted mobilisation.

Both the funds have a minimum investment amount of Rs 5,000. The schemes can invest upto 100 per cent in debt instruments while it has a cap of 20 per cent each for money markets and equity instruments. The schemes offer dividend and cumulative plans. Under the dividend plan, payout will be made on a quarterly basis. All the initial issue expenses will be borne by the AMC in the two plans while the annual recurring expenses have been pegged at 1.68 per cent of average weekly net assets.

Cholamandalam Cazenove has so far launched three funds, including Chola Triple Ace, which was the first income fund in the country to invest only in Triple `A' rated debt instruments. The AMC also manages an umbrella fund, Chola Freedom, with growth and incomeoptions. The third fund is Chola MI '98, which is a closed-end income scheme. The total assets under the AMC's management are over Rs 75 crore.