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Saturday, June 13, 2009

Birla Sun Life MF files an offer document with Sebi

Plans to launch capital protection oriented fund

Name of Fund: Birla Sun Life Capital Protection Oriented Fund – Series 1 to Series 3

Scheme: A close ended capital protection oriented scheme

Investment Objective: The scheme seeks to provide capital appreciation linked to equity market with downside protection at the end of tenure. Equity upside to come from investment in equity exchange traded options, and downside protection to come from investment in debt market securities with tenure comparable to the tenure of the Plan. The option premium will be equal to the estimated interest income, after expenses, at which the securities are invested.

Investment Options: Each plan shall have growth and dividend option (to be decided at the time of launch). Dividend option will have a payout facility. Default Option will be dividend pay-out.

Asset Allocation: The fund will invest up to 65%-100% in debt securities and money market instruments. It will invest upto 35% in option premium.

Money Market Instruments include commercial papers, commercial bills, treasury bills, and Government securities having an unexpired maturity upto one year, call or notice money, certificate of deposit, usance bills, CBLOs and any other like instruments as specified by the Reserve Bank of India from time to time.

The Options Premium offers the actual equity market exposure of upto 100% of NAV. Moreover, the upper limit of 35% investment in Options Premium is applicable only at the time of investment. If due to appreciation in the value of options, the limit of 35% is breached, the fund manager may or may not rebalance the portfolio and may run with the ongoing exposure. However, if the fund manager sells the option before maturity, the reinvestment will be subject to maximum 35% limit on Options Premium

The investments in securitised debt papers may be made upto 100% of the net assets of the scheme.

The scheme shall invest only in such securities which mature on or before the date of the maturity of the scheme

The scheme does not intend to invest in Foreign Securities.

NFO price: Rs 10 per unit

Load structure: The scheme will charge 1.50% to 3.00%, to be decided at the time of launch. And it will not charge any exit load.

Minimum Investment Amount: The minimum investment amount under the scheme is Rs 5000 per application and in multiples of Re 10 thereafter during the NFO period.

Minimum Target amount: The Fund seeks to collect a minimum targeted amount of Rs 10 crore during NFO.

Benchmark Index: CRISIL Balance Fund Index.

Fund Managers: Satyabrata Mohanty will manage the scheme.

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