Tata Mutual Fund has launched a new fund named as Tata SIP Fund Series 3, a 36 month close ended hybrid scheme. It is based on the well-known and widely understood Systematic Investment Plan concept with a convenient difference in the method of investing. The New Fund Offer (NFO) price for the scheme is Rs. 10 per unit. The new issue will be open for subscription from 20 September and will close on 30 September 2011.
Regular SIP plans normally offer investors the facility of postdated cheques or auto debit at time of investment. The Tata SIP Fund on the contrary, invites a lump sum subscription amount during the NFO which will initially be invested in debt and money market instruments. These funds will then be systematically transferred to equities over the close-ended period of 36 months.
Generally Systematic Investment Plans involve writing a number of cheques / payment instructions, storage of multiple account statements, accounting / recording of multiple transactions, computation of tax liability in respect of each installment etc. All these may cause administrative inconvenience to the investors. In Tata SIP Fund, an investor will be making a onetime investment in the fund. This will help investors to reduce the administrative inconvenience.
At the end of the 36 months, investors in the fund have the option of switching to Tata Pure Equity Fund.
Tata SIP Fund is suitable for those who do not wish to invest in equities in one go and for those who wish to cushion themselves against market volatility.
The Primary Investment Objective of the Scheme is to achieve a long term growth. The scheme seeks to achieve investment objective by investing systematically in the Equity /Equity related instruments.
Asset Allocation Pattern: In the first year, the scheme would allocate upto 35% of assets in equity and equity related instruments with high risk profile. On the other side it would allocate 65% to 100% of assets in debt, money market and securitized debt instruments with low to medium risk profile.
In the second year, the scheme would allocate 30% to 70% of assets in equity and equity related instruments with high risk profile. On the other side it would allocate 30% to 70% of assets in debt, money market and securitized debt instruments with low to medium risk profile.
In the third year, the scheme would allocate 65% to 100% of assets in equity and equity related instruments with high risk profile. On the other side it would allocate upto 35% of assets in debt, money market and securitized debt instruments with low to medium risk profile.
The scheme offers growth and dividend option.
The minimum application amount is Rs. 5000 and in multiples of Rs. 1 thereafter.
The fund seeks to collect a minimum subscription (minimum target) amount of Rs. 1 crore under the scheme during the NFO period.
Entry and exit load charge for the scheme will be nil.
The benchmark for the schemes would be taken as the combined value of Crisil Liquid Fund Index and BSE Sensex based on the proportionate weightage of equity and debt in scheme's portfolio
Bhupinder Sethi and Mr. Murthy Nagarajan will be the Fund Managers for the scheme.
Source: http://www.indiainfoline.com/Markets/News/Tata-MF-Launches-Tata-SIP-Fund-Series-3/3941609133
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