Union KBC to launch fund with inbuilt profit booking feature

MUMBAI: Union KBC Mutual Fund will soon launch a close-ended equity scheme with a feature of inbuilt profit booking to enable investors to realise their profits at a pre-defined level, a company official said today.

The new fund offer, Union KBC Trigger Fund-Series 1, will open for subscription on October 14 and closes on October 25, 2013.

"In this scheme, if the NAV ( net asset value) of the direct plan of the scheme crosses Rs 13 per unit or appreciates 30 per cent within the three year period, the scheme will be automatically liquidated and the investors will receive the proceeds within 10 business days," Union KBC Mutual Fund CEO G Pradeepkumar told reporters here.

As per the fund house, if the scheme does not touch 30 per cent trigger level within three years, then the scheme will mature at the end of three years at the prevailing NAV.

"We are trying to provide investors an opportunity to exit at a pre-defined level as investors usually fail to exit during the rise of market," Pradeepkumar said.

He also said the fund house expects to garner around Rs 75 crore for this new scheme.

As per the company, the scheme will invest in a portfolio of equity and equity related securities, predominantly constituted of companies in S&P BSE 200 index.

Union KBC, which has also received approval from Sebi for the series-2 of this scheme, will launch the new series depending on the response from investors to its new fund and market dynamics.

Union KBC Mutual Fund is the joint venture between Union Bank of India and Belgium based KBC Asset Management with Union bank holding 51 per cent stake.