Personal finance Monday

Franklin Templeton MF launches Franklin Templeton Fixed Tenure Fund-Series XIV Plan B; ICICI Prudential MF floats ICICI Prudential Fixed Maturity Plan-Series 53-1 Year Plan A; IDFC Mutual Fund unveils IDFC Fixed Maturity Plan-Quarterly Series 60; LIC launches LIC's Endowment Plus Policy

 Franklin Templeton MF launches Franklin Templeton Fixed Tenure Fund-Series XIV Plan B

Franklin Templeton Mutual Fund has launched Franklin Templeton Fixed Tenure Fund-Series XIV Plan B, a close-ended income fund. The investment objective of the scheme is to generate returns and reduce interest rate volatility by investing in fixed income securities that are maturity on or before the maturity of the scheme along with capital appreciation through equity exposure. The Plan B offers two options - growth and dividend (payout). The tenure of Plan B is three years from the date of allotment of units. The scheme will mature on 5 October 2013. During the new fund offer (NFO), the units will be offered at face value of Rs10 per unit. The new issue opened for subscription on 15th September and will close on 29th September. The minimum investment amount is Rs10,000. Plan B will invest up to 20% of assets in equities and equity linked instruments. It would further invest 80% to 100% of assets in debt securities and money market instruments.

The benchmark is 20% S&P CNX 500 + 70% Crisil Composite Bond Fund Index + 10% Crisil Liquid Fund Index. The Scheme seeks to collect Rs1 crore in each Plan as the minimum subscription and would retain any excess subscription collected.

Jaya Prakash K, Head-Products, Franklin Templeton Investments (India) says, "Franklin Templeton Fixed Tenure Fund Series XIV Plan B is a closed end income fund that seeks to provide relatively stable returns along with capital appreciation. It will invest at least 80% in fixed income instruments and will have a marginal equity allocation up to 20%. The latter helps investors get marginal exposure to the earnings growth being witnessed in India as companies benefit from the strong economic growth." He further adds, "On the fixed income side, we will focus on instruments of relatively higher credit quality and look to reduce interest rate risk. The equity component will be conservatively managed in line with Franklin Templeton's disciplined and process-driven investment philosophy. In other words, investors can have the best of both worlds by investing in this Plan over a three-year period. The Plan provides stability of fixed income instruments and the growth potential of equities."
 

ICICI Prudential MF floats ICICI Prudential Fixed Maturity Plan-Series 53-1 Year Plan A

ICICI Prudential Mutual Fund has launched ICICI Prudential Fixed Maturity Plan-Series 53-1 Year Plan A, a close-ended debt scheme. The investment objective of the Plan under the Scheme is to seek to generate regular returns by investing in fixed income securities/debt instruments which mature on or before the date of maturity of the Plan/Scheme. The tenure of Plan A is one year (371 days) from the date of allotment of units. Two options are available under the Scheme - growth and dividend (payout) option. The new fund offer (NFO) price is Rs10 per unit. The Plan opens of 20th September and closes on 28th September. Since the Plan will be listed on the stock exchange, the exit load will not be applicable. The minimum investment amount is Rs5,000. The minimum target amount is Rs5 crore. Chaitanya Pande is the fund manager for the Scheme. The Plan will be benchmarked against Crisil Composite Bond Fund Index.

IDFC Mutual Fund unveils IDFC Fixed Maturity Plan-Quarterly Series 60

IDFC Mutual Fund has launched IDFC Fixed Maturity Plan-Quarterly Series 60, a close-ended income scheme. The investment objective is to seek to generate income by investing in debt and money market instruments maturing on or before the maturity of the scheme. The Plan offers growth and dividend option. The scheme opens on 20th September and closes on 21st September. The exit load for the Scheme is nil. The new fund offer (NFO) price for the scheme is Rs10 per unit. The minimum investment amount for Plan A is Rs10,000. The minimum target amount is Rs1 crore. Crisil Composite Bond Fund Index is the benchmark index.

LIC launches LIC's Endowment Plus Policy

Life Insurance Corporation of India (LIC) has introduced a new unit-linked pension plan (ULIP) called Endowment Plus under the Insurance Regulatory and Development Authority (IRDA) regime.

Endowment Plus offers investment-cum-insurance during the term of the policy. The Policy is available for people aged seven years to 60 years for a policy term between 10 years and 20 years. The minimum annual premium under the policy is Rs20,000 for regular modes. Under electronic clearing system (ECS), it is Rs1,750 per month and minimum premium is Rs30,000. The plan offers a risk cover of up to 11-30 times of annualised premium or 1.25 times of single premium. Critical illness and accident benefit riders are also available with this policy.

The policy holder has the option to choose any of the four funds namely: Bond Fund; Secured Fund; Balanced Fund and Growth Fund. The option of switching within the funds is available any number of times during the duration of policy. The first four switches every year are free of charge and a charge of Rs100 is levied thereafter per switch.

If the Policy is in full force, a policy holder can avail a loan under the policy after three years to the extent of 30% of the policy holder's fund value and partial withdrawal is allowed after five years subject to conditions. Full risk cover will be available after two years from the date of partial withdrawal. Surrender value is available after five years in case of discontinuance of policy at any stage.

Mortality charges are deducted only if the basic sum assured is more than that of the fund value of the units. There is also an option to encash fund in regular intervals spread over five years from the date of maturity.

At maturity, the policy holder will be eligible for fund value under the policy. In case of death, the nominee will get the higher of the sum assured under the basic plan and the policy holder's fund value. 

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REC gets infrastructure finance company status


New Delhi: State-run Rural Electrification Corporation (REC) today said the Reserve Bank of India (RBI) has granted it the infrastructure finance company status which would allow the firm to lend more to power projects, reports PTI.

The RBI has now categorised REC as an Infrastructure Finance Company (IFC), the company said in a statement.

REC is into financing power generation, transmission and distribution projects in the country.

With IFC status, REC can now take an additional lending exposure of up to 5% of its owned funds in case of a single borrower and up to 10% of its owned funds in case of a group of borrowers.

The total permissible exposure would thus be 40% of owned funds in case of a group of borrowers.

REC also becomes eligible for issuance of infrastructure bonds and for raising funds up to $500 million (Rs2,500 crore approximately) through external commercial borrowing (ECB) in a year.

REC is the second company after Power Finance Corporation (PFC) to be accorded the status of IFC by the Reserve Bank. PFC was accorded the status in July this year.

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USE’s currency derivatives trade receives positive response

Mumbai: The United Stock Exchange of India (USE), a new bourse for currency derivatives, began operations today and witnessed good volumes in the first hour of trade, reports PTI.

After the National Stock Exchange (NSE) and Multi Commodity Exchange (MCX), USE is the third bourse offering currency trading in the country.

"We are witnessing good volumes and it (volumes) has already crossed Rs2,000 crore in the first hour of trading," USE director Gaurav Arora told reporters after the launch.

The exchange commenced operations in the all four currency pairs allowed by the Securities and Exchange Board of India (SEBI) — dollar-rupee, euro-rupee, yen-rupee and pound-rupee.

Currency derivatives can be described as futures contracts between the sellers and buyers, whose values are to be derived from the underlying assets — the currency amounts.

Worldwide, currency derivatives market is bigger than equities with volumes of $3 billion a day while India's contribution is only 1%. Hence, there is a greater prospect for growth, USE head T S Narayanswamy said.

Reserve Bank of India (RBI) deputy governor Shyamala Gopinath, who along with SEBI chairman C B Bhave, inaugurated the bourse, said investors should start looking at currency trading as a new asset class.

Over-the-counter (OTC) activities are for those who have an underline commercial interest and want to hedge, but an instrument like this must be used by all residents, including those who want to speculate on currencies, Ms Gopinath said.

USE is a bourse on set up on public-private partnership with 21 public sector banks, five top private banks, the BSE, state-owned entity MMTC, Jaypee Capital, etc having stake in it.

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