Fund houses announce new offerings which are mix of equity funds, tax-saving schemes & hybrid funds

MUMBAI: Fund houses have announced a host of new offerings which are a mix of equity funds, tax-saving schemes and hybrid funds. For instance, Axis Mutual Fund has launched ‘Axis Children’s Gift Fund’, a hybrid fund that helps investors prepare to meet important goals such as education/marriage of their children. Investments in the scheme can be made only in the name of a minor who is less than 18 years.

Grandparents, close relatives can make a donation in the name of the minor child without any cap on the investment limit. The fund will work like a balanced fund with 40-60% in equities, 25-55% in debt and the rest 5% to 15%, in cash future arbitrage. From a taxation perspective, the fund will qualify as an equity-oriented fund.

Peerless Mutual Fund, Mirae Asset Management and DHFL Pramerica have launched NFOs of their ELSS schemes. Since it is the start of the tax saving season and these fund houses did not have a scheme that qualifies for tax benefits under Section 80C, these NFOs will help them complete their product mix and attract more investors.

In addition, Peerless Mutual Fund has also launched an open end midcap fund. The fund house believes midcaps have the potential to become large caps, as with the right fundamentals and minority shareholder-friendly management, the company may grow into a large cap over time.

Meanwhile, Tata Mutual Fund has announced five new fund offerings (NFOs) and a new series of an existing fund under 'Own a Piece of India' theme. The fund house has come with an NFO after six years.

The new funds from the Tatas are —Tata Banking and Financial Services Fund, Tata India Consumer Fund, Tata Digital India Fund, Tata India Pharma & Healthcare Fund and Tata Resources & Energy Fund. The group’s existing fund is called Tata Infrastructure Fund. Own a Piece of India allows investors to take customized preferences in equity by combining exposure to different segments with 'One Application — One Cheque'.

Additionally, a multiple fund manager approach is adopted with this new offering wherein each fund will have a Lead Fund Manager and supported also by one or more fund managers in the portfolio management process. Sundaram Mutual Fund has launched its Micro Cap Series-X, while LIC Nomura has launched an Sensex traded ETF.

While fund houses are likely to create a lot of noise during the launch of these products, distributors advise investors to be cautious while applying in new fund offers. “Invest as per your investment objective. Simple products with a time-tested track record are best. Avoid the Rs 10 NAV trap,” said Anup Bhaiya, MD and CEO of Money Honey Financial Services.