Birla Sun life Capital Protection Oriented Fund Series 1- NFO Analysis

NFO Date: 5th Feb 2010 to 5th March 2010
Fund Features
Scheme Objective : To seek capital protection by investing in high quality fixed income securities maturing in line with the tenure of the scheme and seeking capital appreciation by investing in equity and equity related instruments.
Type of Scheme: A Close Ended Capital Protection Oriented Scheme.
Bench Mark Index: CRISIL MIP Blended Index
Min Investment: Minimum of Rs. 5,000/- and in multiples of Rs. 10/- thereafter during the NFO period.
Liquidity: The scheme will have duration of 27 months from the date of allotment.
Listing: The scheme is a close ended Scheme and the units offered under the Scheme will be listed on one or more recognized stock exchanges as may be decided by AMC within 30 days from the closure of the NFO Period.
Entry Load / Exit Load: Nil (No redemption/repurchase of units shall be allowed prior to the maturity of the scheme. Investors wishing to exit may do so through stock exchange mode)
Options: Growth Option only.
Fund Manager: Mr. Satyabrata Mohanty
Investment Strategy
The fund will largely invest in debt and a small portion in equity.
Debt Strategy
The debt investments will be made in CRISIL approved AAA / AAA (so) rated securities only.
The duration of such instruments would be 27 months or lower, calculated from the date of fund's allotment.
The debt portion will be managed passively.
Invest in debt securities as much amount as required to reach 100 at maturity.
Equity Strategy
Equity portion will be managed actively with absolute return bias.
Invest in themes where ever there is investment opportunity without having any market capitalization bias.
The Fund intends to play the ongoing themes and sector preferences.
It is going to be an 'all - cap' portfolio.
The sectors which look positive in the current market
Capital Goods, Infrastructure & Power
Consumer Discretionary and IT & Commodities
Banking & Financial Services
The fund may also look at opportunities in some high growth emerging sectors and Mid-cap stocks
Why invest in this fund?
This fund is aimed at offering better than high quality deposit returns for which it intends to take controlled exposure to equity, after providing for capital protection at the end of the tenure.
The Fund's tenure of 27 months is designed to offer triple indexation benefit to investors.
The tax saving avenues like NSC, post office deposit etc. have a lockin of 5-6 years.
Investing in company deposit could potentially yield higher, but the risk level could be higher compared to a diversified portfolio of AAA rated securities. The interest from such deposits is again subject to income tax, shaving off upto 1/3 of total return.
Ideal for Investors
The fund is targeted for conservative savers who seek returns that could be higher than high quality conventional deposits, without compromising the safety of the portfolio.