The fund NFO is targeting a collection of Rs 75 crore.
Union KBC has announced the launch of its closed ended equity scheme, Union KBC Trigger Fund -Series 1. The NFO opens for subscription on October 14, 2013 and closes on October 25, 2013.
The fund has a unique feature of exit in which the scheme automatically liquidateson the 10th business day whenever the fund hits its pre-defined trigger of 30% returns anytime within 3 years. However, if the fund doesn’t reach its pre-defined level, the scheme will mature after 3 years from the date of allotment at its prevailing NAV. Also, there would be a marginal difference in returns since the scheme redeems in 10th business day after hitting its trigger owing to some procedural constraints in the winding up of fund.
G Pradeepkumar, CEO, Union KBC MF, said that this was perhaps the first of its kind fund in the history of Indian MF industry. Speaking to journalists at apress conference, Pradeepkumarstruck an optimistic note, “This fund will be a game changer for the MF industry.Keeping in mind the good monsoon, general elections and strong expectation of growth in the second half of FY 2013-14 in mind, we have launched the scheme at this juncture. Also, we have structured it as a close ended fund so that the fund manager can get adequate time with a flexibility of setting a definite exit point.”
“Investors are always in a dilemma when it comes to exit as no one advises them when would be the right time to take an exit call. Ouraim is to reduce ambiguity of investors about exit time. Also, we have found that 80% of investors having trigger facility exit their funds after getting 30% returns whereas just 53% of investors, without trigger facility, redeem their investments at the 30% level,” said Ashish Ranawade, CIO, Union KBCand the Fund Manager of this fund. He disclosed that the scheme would focus on 35 to 40 stocks and follow a bottom up approach with buy and hold strategy.
The scheme aims to generate capital appreciation by investing in a portfolio of equity and equity related instruments. No exit loads will be charged in the scheme. The minimum investment is Rs 5000. The scheme will be benchmarked against S&P BSE 200 index.
The AUM of Union KBC MF was Rs 1980 crore as on September 2013.
