The Hindu : Business : Birla Sun Life to launch multiple yield fund

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Friday, Aug 11, 2006

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Birla Sun Life to launch multiple yield fund

Corporate Reporter

Will invest 70 p.c. in debt instruments and 30 p.c. in equity

CHENNAI: Birla Sun Life Mutual Fund will soon come out with a multiple yield fund, according to A. Balasubramanian, Chief Investment Officer. The fund will invest more than 70 per cent of the corpus in debt instruments and a maximum of 30 per cent in equity. Mr. Balasubramanian was here to launch `Birla Long Term Advantage Fund', a scheme aimed at providing long-term capital appreciation. This would be done by investing predominantly in a diversified portfolio of equity and equity related securities, consisting of reasonably priced stocks, which were expected to post attractive growth in three to five years. There were many stocks, which would provide good returns over a longer period with fundamentals remaining intact, Mr. Balasubramanian said.

This close-ended fund will also use derivatives to the extent of 50 per cent of the portfolio that will create hedges during extreme volatility in stock markets. Derivatives, when used for hedging, could help reduce the volatility of the portfolio, he said.

Mr. Balasubramanian said close-ended funds have outperformed open-ended funds and Birla Tax Plan `98, a close-ended product launched in 1998, had generated superior returns in the last eight years, outperforming the BSE Sensex and equity linked savings schemes.

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