L&T MF launches new monthly product

“In the challenging environment,where the risk of rising interest rates has increased and global markets seem to be volatile,we believe,this product will offer risk-adjusted returns,” L&T Finance Holdings President and Whole-Time Director N Sivaraman said.

“Since the acquisition (of the fund house from DBS Cholamandalam),we have invested over Rs 60 crore in the business. We have made that investment to build the network,the organisation,and visibility. We have to make more investment in the business for the next three to four years,before it reaches a substantial size,” he added. L&T had acquired DBS Cholamandalam AMC for Rs 45 crore in 2009.

Bishnoi said,these monthly income plans raise about Rs 100-200 crore. The transaction fee will be applicable as per Sebi and Association of Mutual Funds in India (Amfi) norms.

Distributors would be allowed to charge Rs 100 as transaction charge per subscription and no charge can be made for investments below Rs 10,000 according to Sebi. Also,as an incentive to attract new investors,a distributor may be paid Rs 150 as transaction charge for a first time investor in mutual fund,Sebi had said in July.

The new scheme opens today and closes on October 11.

The minimum application amount for the scheme is Rs 10,000 for dividend and Rs 5,000 for growth. It also offers a systematic investment plan for Rs 1,000. The scheme will charge an exit load of 1 per cent,if redeemed within a year.

According to the Amfi data,the fund house’s average assets under management stood at Rs 5,214.70 crore as on June 30,2011.