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Wednesday, December 24, 2008

Edelweiss MF launches Edelweiss ELSS Fund

NFO Period only on 26 December 2008

Edelweiss Mutual Fund has announced that initial offer period of Edelweiss ELSS Fund will be only on 26 December 2008. The fund will reopen on 1 January 2009. It is an open-ended equity linked savings scheme. The face value of the new issue will be Rs 10 per unit.

The primary objective of the scheme is to generate long-term capital appreciation with an option of periodic payouts at the end of lock in periods from a portfolio that invests predominantly in equity and equity related instruments.

The scheme will have a single plan (ELSS Plan) with dividend and growth option. Dividend option shall have reinvestment, payout & sweep facility. The minimum investment amount is Rs 500 and in multiples of Rs 500 thereafter.

The scheme seeks to collect a minimum corpus of Rs 1 lakh during NFO period.

Lock-in period: The scheme is open for continuous redemption on all business days subject to the completion of a lock-in period of three years from the date of allotment of units, as prescribed in the ELSS guidelines.

The scheme will invest 80%-100% in equity & equity related instruments with high-risk profile. It will invest up to 20% in the short term debt & money market instruments. Money Market Instruments include CPs, commercial bills, Corporate Debt, T-Bills, and Government securities having an unexpired maturity up to one year, CDs, usance bills, CBLOs, repo/ reverse repo and any other like instruments having a maturity of 1 year or less, as specified by the RBI from time to time. Short-term debt instruments include debt instruments with daily to monthly put/call options, debt instruments with maturity less than one year and other like debt instruments.

As per ELSS Guidelines, the funds collected under the scheme shall be invested in equities, cumulative convertible preference shares and fully convertible debentures and bonds of companies. Investment may also be made in partly convertible issues of debentures and bonds including those issued on rights basis subject to the condition that, as far as possible, the non-convertible portion of the debentures so acquired or subscribed, shall be disinvested within a period of twelve months. Further, it shall be ensured that funds of the scheme remain invested to the extent of at least eighty per cent in securities specified above.

Also, as per the ELSS Guidelines, the Fund may hold up to 20% of net assets of the plan in short-term money market instruments and other liquid instruments to enable it to redeem investment. The Scheme may engage in stock lending. Not more than 25% of the net assets of the scheme can generally be deployed in stock lending and not more than 5% of the scheme will be deployed in stock lending to any single counter party.

The scheme will charge 2.25% as an entry load. However, the scheme will not levy exit load.

The performance of the scheme is being benchmarked to the performance BSE 500.

Tarbir Shahpuri will manage the investments under the scheme.

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