L&T Mutual Fund Launches L&T Emerging Businesses Fund

L&T Mutual Fund announced the launch of L&T Emerging Businesses Fund. The fund is a two-year closed-ended scheme with automatic conversion into an open-ended equity scheme after the completion of two years from the date of allotment. The new fund offer will remain open from April 22-May 6, 2014.

The aim of the fund is to generate long term capital appreciation from a diversified portfolio of predominantly equity and equity related securities including equity derivatives in the Indian markets. The key theme is to invest in "Emerging Businesses"- that is in companies which are in the early stage of development and have the potential to grow their revenue and profits at a higher rate as compared to broader market.

The Fund is benchmarked to the S&P BSE Small Cap Index, and will have a normal allocation to equity and equity related securities of small cap companies within a range of 50% to 100% of net assets. The allocation to equity and equity related companies of other companies will be within a range of 0-35%. The Fund may invest up to 35% of net assets of the fund in debt and money market instruments. The fund also has the mandate to additionally invest in foreign securities.

The minimum amount for lump sum investments is Rs. 5000. The Systematic Investment Plan (SIP) option will be available during the NFO period with a minimum of six instalments (for monthly SIP) and four instalments (for quarterly SIP) and each single instalment of a minimum of Rs. 1000 each, subject to a minimu aggregate of Rs. 6000.

Speaking at the launch, Ashu Suyash, Chief Executive Officer, L&T Investment Management, said, "With the launch of the L&T Emerging Businesses Fund, we are broadening our offering of equity funds. This NFO provides investors with an opportunity to benefit from investing in the undervalued segment of the market while adding style diversification to their portfolios. We believe emerging business built around a scalable opportunity with strong laedership, good governance and balance sheet strength can reward its investors handsomely. The close-ended cum open ended structure ensures that investor money is not locked in for long periods of time and should the need arise; money may be redeemed at the end of the 2 year close period. Further investors can participate through the systematic investment plan route as well."

The market is at its peak currently. Profit-booking is likely to take place. However, we advise the investors to remain cautious and not invest all the money together.