The fund house has stopped upfront and trail commission for fresh inflows in its open ended debt fund Indigo Fund
Mumbai: Canara Robeco Mutual Fund has stopped upfront and trail commission for fresh inflows in its open ended debt scheme - Canara Robeco InDiGo Fund from 9th December 2011 in order to curb inflows in the scheme, which otherwise would breach SEBI regulation of investing more than 5% of NAV in another scheme.
According to the fund’s mandate, it can invest up to 35% in gold ETFs and a minimum of 65% in debt and money market instruments. According to Canara Robeco’s November factsheet, the scheme’s AUM stood at Rs. 767 crore at the end of November. Its exposure to Gold ETFs had reached 28.91% in November 2011 and the rest is deployed in debt and money market instruments.
The fund has exposure to Gold ETFs of Goldman Sachs Mutual Fund (16.41%), Kotak Mutual Fund (6.69%), and Reliance Mutual Fund (5.81%) as on November 2011.
In an email communication to distributors the fund house has said, “According to SEBI Mutual Fund Regulations clause 4 of schedule 7 of the SEBI Mutual Fund Regulations, a scheme may invest in another scheme under the same asset management company or any other mutual fund without charging any fees, provided that aggregate inter-scheme investment made by all schemes under the same management or in schemes under the management of any other asset management company shall not exceed 5% of the net asset value of the mutual fund : Provided that this clause shall not apply to any fund of funds scheme.The above rule may restrict the scheme's further exposure to Gold ETFs considering our aggregate AUM. In order to comply with the above rule, the management has decided to regulate further inflows into the above scheme, so that the investments in other schemes remain within the limits prescribed in the asset allocation pattern,” stated the email.
It is not clear what happens to the existing SIPs in the scheme and whether trail on exiting investments will be continued. An email query sent to the fund house remained unanswered till the time of publishing this piece.
The fund was launched in June 2010 and has delivered 13% since inception.
