BNP Paribas Capital Protection Oriented Fund - Series II

BNP Paribas Mutual Fund has launched a closed end income fund - BNP Paribas Capital Protection Oriented Fund - Series II (35 months and 9 days). The new fund offer is currently open for subscription and closes on July 22.

The Structure

The scheme will invest 82%-100% of assets in debt securities and money market instruments with the balance 0-18% to be invested in option premiums.. The debt portion of the scheme will invest in securities with a view to hold them till maturity and are rated investment grade by a rating agency.

The scheme will actively manage the equity portion by investing in exchange traded call options. The investment team will evaluate the prevailing premium levels on the call options with tenure suitable to the scheme.

The fund manager could implement a buy and hold (passive investment) strategy for the Equity Index Call Options held or buy a series of shorter term Equity Index Call Options, thereby actively managing the options strategy. The minimum investment amount is Rs 5,000 and in multiples of Rs 10 thereafter.

After the NFO, the Units of the Scheme will be listed on the NSE, where investors can buy or sell units at market prices.

Why invest?

Capital protection fund helps you preserve your capital, with a marginal exposure to equities. This has the probability to give you higher risk adjusted returns.

Why not invest

Since the fund is close ended, liquidity will be very low. In case you wish to sell units you may have to do so at a discount to the NAV