IDFC Premier Equity Plan A:An outstanding outperformer

There’s no arguing with the numbers. In its history, IDFC Premier Equity Plan A has underperformed the category average in just two quarters (out of 14).

In 2007, it trounced the competition with a return of 110 per cent (category average: 64%). In the bear phase running from January 8, 2008 to March 9, 2009, it shed 54 per cent (category average: -64%). Its 3-year trailing returns of 30.45 per cent (July 31, 2009) places it streets ahead of the competition.

Hats off to fund manager Kenneth Andrade who boldly rides his bets. Little wonder that allocation to Services touched 44.74 per cent (May 2007) or FMCG accounted for 21.66 per cent (March 2009). Neither does he shirk from taking contrarian stands; his bias towards Services ever since inception and his restraint from going heavy on Energy, despite the sector gaining impressively, are cases in point.

In 2007 he did not jump into Metals. Ironically, the BSE Metal index delivered 121.47 per cent that year and yet the fund returned 46 per cent higher than the category average.

But Andrade is unsure if he should be branded a contrarian. “This fund attempts to capture shifts in the business environment with regard to new business opportunities, technologies and trends. We try to position ourselves ahead of the chain. It may or may not pay off but we must have sufficient reason to believe in what we are investing in,” he says.

With a focus on small companies, Andrade has an interest in keeping the fund size small. Hence it was shut for fresh investments during periods in 2006 and 2007. He maintains a tight portfolio spread across 26 stocks (1 year average) whose allocations don’t cross 7 per cent, barring Shree Renuka Sugars.

Ever since Andrade took over the fund in February 2007, he has maintained a high debt allocation which peaked at 25.53 per cent (June 2008) while cash holding was at 12.24 per cent (May 2008). Due to these high allocations he missed out on the latest rally to some extent with a return of 91 per cent, as against the category average of 104 per cent (March 9 – July 31, 2009). “The companies in this segment are not very liquid. We don’t want to be caught on the wrong foot, so have to ensure ample liquidity for redemptions, so that we do not disturb the entire portfolio,” he says. In a nutshell, a compelling pick.

Edelweiss Diversified Growth Equity(E.D.G.E) Fund — NFO

Scheme Type: An Open Ended Equity Scheme

Investment Objective :
The primary objective of the Fund is to generate long term capital growth from a diversified portfolio, investing predominantly in equity and equity related securities.

However, there is no assurance that the investment objective of the Scheme will be realized and the Scheme does not assure or guarantee any returns.

Benchmark Index : BSE 500

Fund Manager : Mr.Tarbir Shahpuri
NFO Open date: 04-May-2009
NFO Close date: 08-May-2009

Who should invest? Investors with a moderate to high risk profile looking to invest for the medium to long term in equities as an asset class.

Plans / Options:
The Scheme will have three Plans i.e. Plan A, Plan B, Plan C with common portfolio & will have Dividend and Growth Option. Dividend Option shall have Reinvestment, Payout & Sweep Facility. Each Plan represents interest in the same portfolio of investments and is identical in all respects to each other plan, except for differences relating to annual recurring expenses, minimum subscription amount to be brought in by the investors applying for the units in the Scheme & the load structure.The AMC reserves the right to introduce further Plans / Options as and when deemed fit.

Minimum Application Amount / No. of Units:
Plan Purchases Additional Purchase Minimum Redemption Amount
Plan A Rs. 1,000/- & multiples of Re.1 Rs.1,000/- & multiples of Re.1 Minimum of Rs. 1,000/- & in multiples of Re. 1/- thereafter
Plan B Rs.25,000/- & multiples of Re.1
Plan C Rs. 10,000/- & multiples of Re.1

Load Structure:

(A) Under Normal Circumstances
Plan A Plan B Plan C
Entry Load 2.25% Nil Nil
Exit Load Upto 180 days: 1.50 % Upto 90 days: 1.50% Upto 180 days: 2.00%
From 181 days upto 365 days: 1.00% From 91 days upto 365 days: 1.00% From 181 days upto 365 days: 1.50%
From 366 days: Nil From 366 days: Nil From 366 days upto 545 days: 1.00 %
From 546 days upto 730 days: 0.50 %
From 731 days: Nil

(B) Under ROA (Right of Accumulation)
Particulars Plan A Plan B Plan C
Limits on ROA:
*Accumulated Investment Rs. 1 Crore & above Rs. 1 Crore & above Rs. 1 Crore & above
**Discounting Days Within 10 Business Days Within 10 Business Days Within 10 Business Days
***Discounting Cycle & Exit load Upto 90 days: 1.5% Upto 90 days: 1.5% Upto 90 days: 2.0%
From 91 days and above Above 90 days: Nil From 91 days and above
upto 180 days: 0.50% upto 180 days: 1.00%
Above 180 days: Nil From 181 days and above
upto 365 days: 0.5%
Above 365 days: Nil

* This is the minimum amount invested by the Qualified investors/ unit holder across the discounting days & held throughout the discounting cycle as defined by AMC/ Trustee from time to time to avail the benefits of right of accumulation.

** Certain number of days, as determined by AMC from time to time, within which Qualified Investor/ unit holder has to invest in the Scheme/Plan, an amount equivalent to the accumulated investment specified by the AMC from time to time to avail the right of accumulation. The calculation of these discounting days will include the date of submission of Statement of Intention (SOI).

*** Certain number of days, as determined by AMC from time to time, during which the Qualified Investor / Unit holder should retain & remain, invested with the accumulated investment, brought during the discounting days to avail the right of accumulation.

Cut-off Time and applicable NAV:

(a) Cut off Timing for Subscriptions:
In respect of valid purchase applications accepted at an Investor Service Center upto 3.00 p.m. with a local cheque or demand draft payable at par at the place where it is received – closing NAV of the day of receipt of application;

In respect of valid Purchase applications accepted at an Investor Service Center after 3.00 p.m. with a local cheque or demand draft payable at par at the place where it is received – closing NAV of the next Business Day ; and Where the application is received with an outstation cheque or demand draft which is not payable on par at the place where it is received – closing NAV of day on which the cheque or demand draft is credited.

(b) Cut off Timing for Redemptions:
In respect of valid applications received upto 3 p.m. by the Investor Service Center, the closing NAV of the day of receipt of application.

In respect of valid applications received after 3 p.m. by the Investor Service Center, closing NAV of the next Business Day shall be applicable.

Note: Valid applications for ‘switch-out’ shall be treated as applications for Redemption and for ‘switch-in’ shall be treated as applications for Purchase, and the provisions of the Applicable NAV and cut-off time as mentioned above shall be applied respectively to the ‘switch-in’ and ‘switch-out’ applications.

Pay out schedule for Redemption:
Within 10 business Days of acceptance a valid redemption request.

Cheque to be drawn in favor of: “E.D.G.E Fund & PAN No. _________”

Facilities Available:

1. Trigger
2. Right of Accumulation
3. Systematic Investment Plan(*)
4. Systematic Withdrawal Plan(*)
5. Systematic Transfer Plan(*)

(*) These facilities are available for ongoing purchases only

UTI mutual funds to merge equity schemes

UTI Asset Management Company (UTI AMC), one of the largest fund houses in the country, is planning a mega merger of the equity schemes in its portfolio.

The process is likely to be kicked off in the current financial year.
Speaking to TOI, UTI MF chairman & MD U K Sinha said the organisation currently had too many equity schemes, which would be pruned by over 50%. Currently, the fund house has 96 schemes, of which equity schemes number 29.
The number of equity schemes is likely to be brought down to 10 through mergers over a period of time. Sinha said too many schemes in the market only proved that the Indian mutual fund industry still remained immature.
“Here, investors prefer new fund offerings than an existing fund. But it is just the opposite in matured markets. One should understand that the possibility of higher returns is much more in existing schemes. NFOs are more of a marketing strategy. But as all fund houses are doing that, we, too, have to come out with NFOs,” he added.
Sinha said that during the last financial year, it had merged nine schemes into three. This year, it would consolidate four schemes into two. Commenting on balanced schemes, he said that UTI has a very good bouquet of balance funds. “We have now also introduced systematic investment facility under ULIP. There is no plan to change the number or add any new scheme in this space,” he added.
Sinha said the number of fixed maturity plans (FMP) at 35 is also quite high. But he added that it is not possible to prune FMPs. “FMPs have a different maturity period and so it is not possible to merge them,” he added.
He said demand for corporate bonds is very high as banks are still very cautious about lending. “UTI has lend over Rs 5,000 crore in last couple of months. The figure for the MF industry, as a whole, is Rs 35,000 crore,” he added.
Meanwhile, UTI AMC has tied up with Coopers Wealth Creators and Tower Infotech for providing investment opportunities through micro pension initiative under UTI Retirement Benefit Pension Fund to employees and business associates of Tower Infotech.
Senior V-P and regional head (east) of UTI AMC, T K Maji, said the micro pension initiative is aimed at providing social security cover to private and unorganised sectors.