BIRLA MUTUAL FUND LAUNCHES TWO NEW SCHEMES:
Birla Index Fund and Birla Midcap Fund – IPO opens on 10th September, 2002
Birla Sun Life AMC is launching two new growth oriented schemes - Birla Index Fund and Birla Midcap Fund
on 10th September, 2002.
Birla Index Fund is an open-ended index linked scheme that aims to generate returns that are commensurate
with the performance of the S & P CNX Nifty. Nifty is one of the most scientific indices in India and comprises 50
blue chips, large cap, liquid and highly traded stocks.
The scheme endeavors to be low on cost, and aims at delivering market returns through a broadly diversified
portfolio.With as little as Rs 5000 an investor can enter this scheme and get access to a basket of blue chip
stocks. As part of the fund management process the AMC would use derivative instruments like Index futures
inorder to achieve portfolio balancing and hedging.
Birla Index Fund offers two plans – Dividend & Growth. The initial public offer is at Rs.10 per unit for cash at
par. The IPO of Birla Index Fund will be open from 10th Sept to 17th Sept, 2002. The schemes have no entry
load but an exit load of 1%, if exited within 1 year for applications less than Rs. 5 lacs and nil for applications over
Rs. 5 lacs form the date of allotment.
Keeping in mind the fact, that the bulk of over 5000 stocks listed on the stock exchange, fall under the Midcap
range, Birla Sun Life AMC has launched its new scheme- Birla Midcap Fund, that focuses on the segment. As
defined by CNX Midcap Index, the midcap segment constitutes stocks that are in the range of Rs. 150 to Rs.
1500 market capitalization.
Many Mid cap companies are run by quality management with strong business models. These businesses, being
in the growth phase, their recognition is still limited. As such the share prices of these companies do not
adequately reflect their future prospects. These stocks are not too small to be too risky nor have they acquired a
size that commands large market following.