Fidelity MF launches equity fund, plans intl funds in India

MUMBAI: Fidelity Mutual Fund today announced the launch of its Fidelity India Value Fund, an open-ended, diversified equity fund.

The company is also looking at launching its international funds in the Indian market, a top company official said here.

"With the launch of the India Value Fund, we are broadening our offering of equity funds. Value investing has at its heart a bottom-up stock picking approach given its focus on finding undervalued stocks," Fidelity International's Managing Director and Country Head, Ashu Suyash, told reporters here today.

The fund will invest in Indian and international equities with a higher focus on undervalued securities to deliver long-term capital appreciation.

"We are also looking at launching international funds in the Indian markets. We still have to go through necessary approval process before their launch here," Suyash said.

The Fidelity India Value Fund's new fund offer (NFO) will remain open from November 16 - December 15, 2009.

"Value investing has a real role to play even in a growth economy. The fact is that there is little or no correlation between whether a stock is undervalued and the GDP growth of that economy. If you look at the last ten years, in which India saw strong GDP growth, you would still find that value outperformed growth by two times," Fidelity India Value Fund's Fund Manager, Nitin Bajaj, said.

"As long as markets are driven by sentiment and emotions like fear and greed, we will see market inefficiencies and momentum which will give rise to valuation anomalies. It is these undervalued stocks that I'm looking to uncover," Bajaj said.

Benchmarked to the BSE 200, the Fidelity India Value Fund will have a normal allocation to equity and equity-related securities within a range of 80 per cent to 100 per cent of net assets. The normal allocation to other instruments, including cash, debt and domestic ETFs will be within a range of 0-20 per cent.

The Fund may also invest up to 10 per cent of net assets of the fund in foreign securities including overseas ETFs.

Fidelity International's Indian asset management company has total assets under management of over Rs 9,000-crore and more than 16-lakh customer accounts, Fidelity offers Indian investors investment options through its five equity funds and five fixed income, hybrid funds.