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Aabhas Pandya
Mumbai, July 23: Birla Cash Plus, the short-term debt plan from Birla Mutual Fund, has slashed the minimum investment from Rs 25,000 to Rs 10,000. The fund has also introduced the facility of paying 95 per cent of the redemption amount in Birla Cash Plus through a post-dated cheque at the time of investment itself. Birla Cash Plus was the first short-term liquid plan in the domestic industry. A quasi money-market mutual fund, the scheme was aimed at tapping short-term surplus with corporates and high networth individuals, while veering around the 15 (earlier 30) day lock-in, applicable in MMMFs.
"The reduction in minimum investment is aimed at increasing the investor base of Birla Cash plus, which has an aggregate inflow of over Rs 1,400 crore since inception in June 1997. While money keeps flowing in and out of Cash Plus, the scheme has still grown as more investors continue to come," said NK Sharma, senior VP and chief of business development, Birla MF. Some of the other short-term plans with a minimuminvestment of Rs 10,000 are SBIMF's Magnum InstaCash Fund and Kotak Mahindra's K-Gilts. For other short-term debt plans, the minimum investment ranges from Rs 15,000 to Rs 1 lakh.
In Birla Cash Plus, an investor can get a maximum of 95 per cent of the redemption amount in the facility of post-dated cheques. The minimum period of investment in Cash Plus is four days. The five per cent amount that is not paid through the cheque is meant to take care of any interest rate movements in the money markets.
In certain areas, the demarcation line between operations of banks and short-term debt plans is beginning to get blurred. For instance, Birla Cash Plus has provided the facility of anywhere cash in five of its centres for a minimum amount of Rs 10 lakh.
As of June 30, 1999, Birla Cash Plus has given an annualised return of 9.5 per cent for a seven day period. The NAV of the fund was Rs 12.065 on June 30.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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