Reliance, Sundaram MF launch a close ended equity scheme

The two are the latest in the spate of launch of closed end funds

Close ended equity funds seem to be the favoured way for fund houses to get money in their equity funds.  The five recently launched close ended equity funds have collected close to Rs 1500 crore from investors.

Now, Sundaram MF is going to launch a five year close ended equity fund called Sundaram Select Micro Cap Series I. The NFO opens for subscription on December 16, 2013 and closes on December 30, 2013. The fund aims to seek capital appreciation by investing in a portfolio of equity instruments of micro-cap companies. A company whose market capitalization is equal to or lower than that of the 301^st stock by market cap on the NSE at the time of investment will be considered to be in micro-cap category. The fund may also invest some portion of its portfolio in fixed income securities.The fund will be benchmarked against S&P BSE Small Cap Index. S Krishnakumar (Equity) and Dwijendra Srivastava (Fixed-Income) will manage fund. The fund will follow a bottom up approach with emphasis on investing in companies with quality management, unique business strengths, sustainable long-term growth prospects and reasonable valuations.

Nikhil Kothari of Etica Wealth Management says that the investors with high risk appetite and long term perspective can invest in micro-cap funds since such stocks are trading at low valuations.

Reliance MF has also launched Series B of Reliance Close Ended Equity Fund. The NFO is currently open and will close on December 27. Reliance Close Ended Equity Fund – Series A has collected close to Rs. 231 crore.Some distributors said that Reliance MF may come up with third and fourth series of its close ended fund.

The five year Reliance Close Ended Equity Fund Series B seeks to provide capital appreciation by investing in a diversified portfolio of equity & equity related instruments with small exposure to fixed income securities. The scheme will be benchmarked against S&P BSE 200 Index and is co-managed by Sailesh Raj Bhan and Jahnvee Shah.Meta tags: