Financial Daily from THE HINDU group of publications
Saturday, Aug 17, 2002
Birla Mutual eyes mid-cap segment with new launch
KOLKATA, Aug. 16
BIRLA Mutual Fund has sought to keep up with the latest trend by displaying a zest for mid-cap stocks. It has proposed a scheme specifically for mid-cap equities, one that will have the S&P CNX Midcap 200 as its benchmark index.
The proposal for the scheme, which will invest over 65 per cent of its assets in mid-cap securities, has already been lodged with the Securities and Exchange Board of India (SEBI) for approval. These stocks, the offer document has mentioned, are "generally more volatile and less liquid" than their large-cap counterparts.
Birla Mid Cap Fund, as the scheme has been named, will be an open-ended growth scheme, aiming to generate long-term appreciation. It will identify corporates that have a market capitalisation between Rs 150 crore and Rs 1,500 crore. This range will be revised in line with changes in the range of market cap criterion in the benchmark.
In an attempt to diversify and improve liquidity, the fund may consider investing up to 35 per cent in large-cap and small-cap companies.
According to Mr S.K. Mitra, chief of Birla MF, the mid-cap story appears promising in the present context. "This is a happening segment. The market has already taken note of the performance recorded by a number of mid-cap stocks," he said.
While the MF expects such mid-caps to generally outdo the broad markets over a period of time, it will nevertheless pursue the principles of diversification and asset allocation. "The mid-caps we choose will represent a number of sectors. The investor's demand for liquidity will have to be kept in mind as well," Mr Mitra observed.
The proposed scheme will have the two usual plans - - dividend and growth. Birla MF's systematic investment plan, incidentally, has been branded REAP Regular Extra Advantage Plan.
It may be mentioned here that Birla MF has also lined up an index fund, which will track the Nifty. This will be the MF's maiden index-related product.
`Dynamic' equity from Pru ICICI
In the meanwhile, Prudential ICICI MF has sought SEBI's nod for an actively-managed equity fund, that will require a fairly high minimum investment (Rs 25,000). The fund manager will be free to move investments across a range of equities and equity-related instruments.
The fund manager, mentions the offer document, will have the "discretion to take aggressive asset calls". At any point of time, given the relevant market conditions and the stance adopted by the fund, exposure to equities can be reduced to even zero!
The proposed Dynamic Equity Plan will join the ranks of pushy equity plays such as Sundaram Select Focus. It is expected to be positioned differently from Pru ICICI Growth Fund, the MF's flagship equity product.
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