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Wednesday, May 06, 2009

Baroda Pioneer PSU Bond Fund files documents with Sebi

Investments will be in debt instruments issued by PSUs

Baroda Pioneer Mutual Fund has filed offer document with Securities and Exchange Board of India (Sebi) to launch Baroda Pioneer Public Sector Undertaking (PSU) Bond Fund. It is an open-ended debt fund. The face value of the new issues will be Rs 10 per unit.

The investment objective of the PSU Plan is to generate stable returns with lower risk by investing in fixed income instruments of Public Sector Undertakings (PSUs) - banks, financial institutions, & companies.

The scheme offers two plans i.e. retail plan and institutional plan. Growth and dividend sub options will be available under the both the plans. Dividend payout and reinvestment facilities will be available under dividend option. In dividend option, there will be monthly dividend option and quarterly dividend option.

The minimum investment amount is under retail plan is Rs 5000 and in multiples of Re 1 thereafter. Under institutional plan, the minimum investment amount is Rs 25 lakh and in multiples of Re 1 thereafter.

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

The scheme will invest its entire corpus in debt & debt related instruments with daily call/put option of PSUs with low to medium risk. Investments in money market instruments issued by PSUs shall be up to 100% of assets with low to sovereign risk. The fund will invest up to 100% in treasury bills / government securities created and issued by the Central Government and/ or State Government(s) and /or other similar instruments, as may be permitted from time to time. Sovereign risk in case of securities of Central Government / low risk in case of securities of State Government. There will be up to 100% exposure in repo and CBLO.

The scheme may invest in securitized debt up to 25% of its net assets. No investment will be made in foreign securitised debt. The scheme will invest in debt derivative up to 50% of the net assets of the scheme.

The scheme will not charge any entry load.

For retail plan, the scheme will charge 1.00% exit load for the units redeemed up to 6 months. 0.50% will be the exit load if redeemed up to the expiry of 1 year. Institutional plan will charge 0.50% exit load if redeemed up to the expiry of 6 months.

The benchmark index for the scheme would be Crisil Bond Fund Index.

Alok Sahoo and Hetal Shah will manage the investments under the scheme.

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