Mumbai, Mar 12: Tata Asset Management Company plans to launch a twin-option fund on March 23. The open-ended fund with no load does not provide for assured returns. "Even though we are not assuring any returns, we have devised an investment plan whereby it will be possible to give the investors a return of around 20 per cent annually," said Tata AMC managing director KN Atmaramani.The open-ended growth fund has two portfolio choices for making investments -- a pure equity option and a balanced portfolio option. Investors would be given the option to switch between the two schemes after subscribing to the fund. "We are going to invest only in large-cap companies and will try to introduce an equity culture with sound principles to set a benchmark in the Indian mutual fund industry," added Atmaramani.
The pure equity option will invest 100 per cent of the corpus in equity and equity-related instruments of large-cap and blue-chip companies with a market capitalisation of over Rs 500 crore. This will provide liquidity and growth to the investors.
The balanced portfolio scheme will invest around 60-70 per cent of the funds available in debt and money market instruments and the remaining 30-40 per cent of the portfolio in equity. The investment in equity will also be made in large-cap and blue-chip companies.
The mode of return fixed by the fund is as follows: under the pure equity option, the fund will accumulate the earnings or capital gains as capital accretion, thus providing scope for medium- to long-term capital gains.The balanced portfolio option will offer two choices for receiving income in the form of regular income or dividend option and appreciation option. The fund has identified 70 companies for investment and is rigid as far as investing in other companies is concerned. Tata AMC claims to be the only asset management company which has till date revealed such an exhaustive list of its investment portfolio before the launch of its scheme. The AMC's rationale is that such high levels of transparency will induce investor confidence in the scheme.
Some of the companies which have been chosen for investment are ONGC, HLL, Indian Oil, ITC, MTNL, SBI, HPCL, Reliance, Gail, Bhel, Bajaj Auto, VSNL, Telco, L&T, BPCL, Tisco, Castrol, ICICI, HDFC and Hindalco among others.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
