The Hindu Business Line : Principal Mutual launches Global Opportunities Fund

PRINCIPAL Mutual Fund has launched its Global Opportunities Fund - a diversified equity fund that will invest in shares of international companies. This is first such fund to be launched in the country.

The universe of stocks that the fund can invest in will be large foreign companies that have listed subsidiaries in India and hold a minimum of 10 per cent equity in the Indian subsidiary. Currently, there are about 47 companies that are eligible for investment, including Proctor & Gamble, Nestle, Bayer, Ingersoll Rand and Gillette.

Speaking at the launch of the fund, Mr Sanjay Sachdev, Chief Executive Officer, Principal India, said this is a new asset class, not just a new fund.

The fund will be co-managed by Mr Rajat Jain, Chief Investment Officer, Principal India, and Mr Mustafa Sagun, Managing Director, Principal Global Investors.

While Indian investors will be investing in the fund in rupees, the fund can make investments in dollar, euro or Japanese yen. This would ensure that the investor is exposed to two kinds of returns - equity investment returns and foreign currency hedging returns, according to Mr Sagun.

As the investment in this fund is in Indian currency, this does not fall under the purview of the $25,000 remittance, now allowed by the Reserve Bank of India.

The fund is being indexed against the Morgan Stanley Capital Investment World Index. The initial public offer for the fund will remain open from February 23 to March 19. The price per unit is Rs 10 and the minimum application amount is Rs 10,000, during this period.

There will be no entry load for investments during the initial offer. Subsequently, an entry load of two per cent will be charged, according to the fund prospectus.