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Tuesday, May 19, 2009

Tata MF files offer document with Sebi

Plans to launch Arbitrage Funds

Tata Mutual Fund has filed offer document with Securities and Exchange Board of India (Sebi) to launch Tata Arbitrage Fund – Scheme A an open ended debt income fund and Tata Arbitrage Fund – Scheme B, an open ended equity fund. The face value of the new issues will be Rs 10 per unit.

Investment Objective: Scheme A: The investment objective of the scheme is to provide capital appreciation and dividend distribution primarily through an arbitrage opportunities arising out of price differences between the cash and derivative market and by investing in debt and money market instruments.

Scheme B: The investment objective of the scheme is to provide capital appreciation and dividend distribution primarily through an arbitrage opportunities arising out of price differences between the cash and derivative market and through deployment of surplus cash in fixed income instruments.

Investment Options: Both the schemes will offer two plans viz. regular and institutional plan with growth and dividend option.

Asset Allocation: Scheme A: The fund will invest upto 49% in equities and equity related securities and 49% in equity based derivatives including index futures, stock futures, index options and stock options etc. It also will invest 51%-100% in debt, money market and securitised debt instruments with low to medium risk profile.

If arbitrage opportunities are not available then investments in debt, money market and securitized debt instruments would be 100% of the net assets of the scheme.

Scheme B: The fund will invest upto 65%-80% in equities and equity related securities and 65%-80% in equity based derivatives including index futures, stock futures, index options and stock options etc. It also will invest 20%-49% in debt, money market and securitised debt instruments with low to medium risk profile.

If arbitrage opportunities are not available then investment in equities will either be appropriately hedged or may by reduced and that amount will be invested in money market instruments to protect the interest of the unit holders.

Investment by the scheme in securitised debt will not normally exceed 20% of the net assets of the scheme.

Load Structure: The fund will not charge any entry load. However it will charge an exit load of 0.50% if redeemed within 30 days from date of allotment. If redeemed after 30 days form the date of allotment, the fund will not charge any exit load.

Minimum Investment Amount: The minimum application amount under the regular plan is Rs 10000 and in multiples of Re 1 thereafter and the minimum investment amount under institutional plan is Rs 1 crore and in multiples of Re 1 thereafter.

Minimum Target amount: The Fund seeks to collect a minimum subscription amount of Rs 2 lakh for the scheme.

Benchmark Index: The benchmarks index for both the schemes will be CRISIL Liquid Fund Index.

Fund Manager: Bhupinder Sethi will be the fund manager.

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