MUMBAI, May 7: Sun F&C India is all set to float its maiden mutual fund offering in India. The scheme to be launched in a couple of weeks time will be an equity scheme adopting a `value oriented approach'. Speaking to The Financial Express, Sun F&C Asset Management Company chief executive officer Nikhil Khattau said that scheme to be called the `Sun F&C Value Fund' will be essentially of an open-ended nature. However, it will not be open for sales and repurchases every day. Instead liquidity will be made available every 90 days for a period of 15 days both for sale and for repurchase without a cap on the quantum that can be bought or sold. The scheme will be a no-load scheme and repurchases will be made at NAV related prices. Explaining the rationale for liquidity every 90 days instead of a shorter period, Khattau said that it gives the fund manager the flexibility to make investments without having to bother too much about meeting daily redemption demands implying that investment decisions can be taken more with a view to meet the stated objective of the scheme.

The AMC decided against going for an income scheme despite the fact that the flavour of the moment is income, because it believes that the interest rates are not going to sustain at these levels for long. "In the equity set-up we looked at options of the index approach, the pure growth approach and the value approach and decided that in the current scenario, the value approach is the best," Khattau said. In the value approach, the fund will be looking at investing in 20-40 stocks that have P/E values which are less than that of the market, of the peer group in the industry and the historical value. The value fund will be aiming at giving investors good returns over a medium-term period, he added. Sun F&C Asset Management was incorporated in 1995 and lay low for all this while because the domestic market was not good. However, it did launch an overseas fund in May 1996 — the India Performance Fund which collected $10 million at float. It is an open-ended fund which has seen a 20 per cent appreciation in the net asset value as against an 18 per cent appreciation in the BSE-200 index which is its benchmark. The fund has fixed a cap of $100 million for a period of three years. Sun F&C is a 50:50 joint venture between Sun Securities -- a London based NRI overseas corporate body and F&C -- one of the oldest investment management houses in the UK. After this float is completed, the AMC plans to launch a variety of schemes to meet the needs of all kinds of investors.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.