The new fund offer opened on November 11 and closes on November 25.
Birla Sun Life Mutual Fund has launched an open end fund equity fund called BSL Equity Savings Scheme.
The scheme seeks to provide capital appreciation and income distribution by using a blend of equity derivatives strategies, arbitrage opportunities and pure equity investments.
The scheme will be benchmarked against S&P BSE 200 to the extent of 30% of portfolio, Crisil Short Term Bond Fund Index (30% of the portfolio) and Crisil Liquid Fund Index (40% of portfolio).
The scheme will charge an exit load of 1.50% if units are redeemed/switch-out within 365 days from the date of allotment and 0.50% if units are redeemed after 365 days but within 540 days from the date of allotment. The minimum application size is Rs. 5,000.
The scheme is similar to the ones launched by Kotak and JP Morgan earlier.
After the budget dealt a blow to debt funds by increasing the definition of long term to three years, fund houses are finding innovative ways to provide tax relief to investors. These funds typically dabble in arbitrage, equities and debt market and at the same time provide equity like tax status to investors.
Financial advisors are optimistic that this category will grow in future because of the tax efficiency advantage. Meanwhile, SBI, ICICI Prudential and Reliance have also filed offer documents with SEBI to launch similar schemes.
Fund houses are pitching these schemes as a superior alternative to MIPs.
