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FE Investor Bureau
NEW DELHI, DEC 18: 20th Century Asset Management Corporation plans to float open-end debt and liquid schemes in early 1999. The schemes have been christened Zurich India Income and Liquid Funds. Besides, the AMC proposes to make its existing balanced fund, Centurion Prudence into an open-end scheme. The fund, which has been renamed Zurich India Prudence Fund, was due for redemption in January, 1999. The draft prospectuses for the three schemes have been filed with the Securities and Exchange Board of India.
The launch of the two schemes marks the emergence of Zurich Financial Services group from hibernation after the Swiss major acquired a majority stake in the AMC in mid-1997. Zurich Financial is one of the top 10 managers in the world with assets of $375 billion. The company manages its Indian affairs through Mauritius-based Zurich Finance.
The two schemes also mark the foray of 20th Century AMC into the debt segment. The AMC currently manages four schemes, of which three are growth funds (including anELSS) while Centurion Prudence is a balanced fund. The combined corpus of the four funds is more than Rs 120 crore. Centurion Quantum has the largest corpus under management at Rs 61 crore while Prudence is a distant second with a size of Rs 37 crore.
"It makes sense to make the fund open-end since it is a Herculean task to mobilise money even in current market conditions," says a fund manager.
Centurion Quantum is also likely to go open-end once it approaches redemption in January 2000.
The three open-end funds will offer dividend and growth plans and facility to switch between the open-end funds of the AMC. The minimum investment in the debt and liquid funds has been pegged at Rs 5000. Once the liquid fund goes open-end, it will have a minimum subscription amount of Rs 25,000.
The debt fund will invest in government securities, money market instruments, corporate bonds and debentures. The fund portfolio will generally have debt paper of longer maturity. It can also invest upto 10 per cent inequities. The short-term debt fund, on the other hand, will invest a majority of its corpus in short-term government papers and money markets instruments.
Zurich India Prudence does not propose to charge an exit load from original investors once it goes open-end. The balanced fund will maintain a 60:40 or 40:60 ratio for equity and debt instruments, respectively. It will be benchmarked against a composite index with 50 per cent debt (with a 14 per cent yield) while the rest (equity component) will be derived from S&P CNX 500 index. Since inception, the fund has given a simple return of 9.38 per cent per annum. It has given a combined dividend of 31 per cent or Rs 3.10 since inception. The fund has a current NAV of Rs 10.84 while the units currently trade at Rs 10.10 on the BSE. The price has been on the rise, thereby bringing down the discount to NAV.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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