 Mumbai:
PruICICI Floating Rate Plan has opened for fresh subscription
on 31 March 2003 at a net asset value (NAV) of Rs 10.0028.
It is an open-ended debt fund, targeted at investors with
an uncertain view on interest rates and who would like
to hedge their debt portfolios.
Also
investors looking at steady returns without any market
volatility can look at investing into this fund. The fund
mobilised around Rs 510 crore from the initial public
offering (IPO), which was for one day on 28 March 2003.
The
fund has cumulative and dividend reinvestment options.
The dividend frequency has been set at a fortnightly basis,
which works out better from the tax angle, as the dividends
are tax free in the hands of the investor.
Investors
perceiving uncertainties in the debt markets and wanting
to negate the volatilities (like the impact of the Iraq
war) can look forward to the option of parking their funds
in PruICICI Floating Rate Plan. Religious and charitable
trusts are also eligible to invest in the plan under the
provisions of 11(5) (xii) of the Income Tax Act, 1961.
Floating
rate instruments, though in a nascent stage in India,
are gaining ground and the trend indicates that there
is an appetite for such products. In a floating rate instrument
the interest rate is periodically reset based on a pre-specified
benchmark rate, at pre-specified intervals.
The reset intervals can be six months, three months, one
month and even daily depending on the duration of the
floater.
The
spreads will be higher for longer-term interest rate,
allowing the investor to earn higher carry.
Floaters can be reset to a variety of rates and benchmarks.
Due to the frequency of reset, floaters actually behave
like money market instruments and have low duration.
The
minimum application amount will be Rs 1 lakh and the minimum
additional investment will be Rs 1,000. The cut-off time
for subscription is 10.30 am and the cut-off time for
redemption will be 12 noon. Investors will not have to
bear any entry or exit load and the estimated recurring
expenses are pegged at a mere 0.75 per cent.
Prudential
ICICI Asset Management Company (PIAMC) is the investment
manager to the largest private sector mutual fund in the
country, the Prudential ICICI Mutual Fund. PIAMC enjoys
the strong parentage of the ICICI group, a well-known
and trusted name in financial services in India, and the
Prudential group, one of Britain’s largest players
in the insurance and fund management business.
PIAMC
has over Rs 10,187.32 crore in assets under management
(AUM) as of 28 February 2003 and has 26 branch centres
all over India to service its over 5.5 lakh investors.
Its diverse product portfolio comprises equity, debt and
balanced funds.
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