Bond Fund from UTI
The Unit Trust of India has launched its open end income fund, UTI Bond Fund. The pure debt fund will be entirely invested in fixed income securities including money market instruments. There is no provision for income distribution in the fund. Interest earned and any capital appreciation will be reinvested. Like other open end income funds available in the market today, the UTI Bond Fund offers benefit of indexation and lower tax rate to investors holding the units for more than one year, as investment in the fund is treated as long term capital gains. This benefit is not available to fixed-return investments like bank deposits, company fixed-deposits, corporate debentures or bonds and assured return income schemes. The minimum application amount is Rs 10,000 with subsequent investments in multiples of Rs 500. The initial offer closes on June 17, 1998. The fund will be reopen for continuous sale and repurchase from July 17. Investments for over a year will be on a no load basis.An exit load of 1.5 per cent will be charged on investments of shorter duration.UTI will be charging an annual management fee of 1.10 per cent of the daily average net assets. Though this is in line with management fee being charged by other open end income funds, it is higher that what UTI charges for its MIPs. Investors will be serviced through the 51 UTI branches across the country.
UTI expects to mobilise around Rs 400-500 crore during the initial offer.
Goldshare to go open-ended
Apple Platinum Share and Apple Midas - the two equity funds from Apple Mutual Fund have much in common. The two IPO-boom-to-bust funds were restructured in the last quarter of 1996 when the new fund manager took over. Post restructuring, both the funds are today heavily invested in Infotech, Pharma and FMCG sectors. The top eight holdings of the two funds are same. And not surprisingly, the two funds have posted similar returnsfor the year ended March 31, 1998.
The only difference between the two funds is thatwhile Platinum Share is an open end fund, Goldshare is a closed-end fund. With Apple Mutual Fund deciding to convert Goldshare into an open-end fund from June 15, 1998, the last line of distinction will be pulled down.
Liquid fund from Templeton
Templeton Mutual Fund is planning to launch its short term income fund, Templeton India Liquid Fund. The primary objective of the scheme is to optimise current income and capital appreciation consistent with prudent risk and seeks to provide stability of principal with high liquidity by investing in a portfolio comprising substantially of high quality money market and debt instruments. The fund will normally have between 50 to 100 per cent exposure in money market and upto 50 per cent exposure in debt.
8% dividend from Escorts Income
Escorts Income Bond has announced a 8 per cent dividend in the Income Plan. The fund had earlier paid a 8.25 per cent dividend in October 1997. The Escorts MF has also announced plans to launch its open end incomefund.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
