India's Sahara Group to launch new mutual fund schemes

DUBAI — Sahara Mutual Fund, the mutual fund arm of India's leading business conglomerate, Sahara Group, yesterday announced that it will soon launch a family of mutual fund schemes, featuring an innovative daily Variable Asset Management Fee' structure.

By A Staff Reporter

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Published: Mon 11 Jul 2005, 10:34 AM

Last updated: Thu 2 Apr 2015, 4:38 PM

The schemes will offer investors a platform to participate in the surging growth opportunities presented by Indian equity markets and other related investment instruments.

The first of this family of schemes includes Sahara Wealth Plus Fund. It has been conceived with the primary objective of investing in equity and equity-related instruments of companies that would be wealth-builders in the long-term. Subscriptions for Sahara Wealth Plus are now open in the Middle East through to July 22.

Rajiv Shastri, chief executive officer, Sahara Mutual Fund, while unveiling Sahara Wealth Plus Fund to the Middle East investors said: “Typically mutual funds operating in virtually all global markets levy a fixed Asset Management Company (AMC) fee which is payable by the investors every day regardless of how the schemes perform. With the introduction of our new family of mutual fund schemes, we are pioneering a new concept of levying a performance based AMC fee, making our funds truly mutual. Under this structure, the Asset Management Company levies a fee on the schemes only on days when it meets certain pre - specified performance criteria.’‘

“The daily Variable AMC Fee' further demonstrates our core belief of earning a fee and not simply charging it. By doing so, we are aligning our interests with those of our investors ensuring that the Asset Management Company desires performance as much as investors do,” he added.

Shastri further said that the company would ensure that all the funds in its portfolio will be operated and managed in a completely transparent manner. “The computation of the Net Asset Value (NAV) of our schemes has been outsourced to India's leading private bank, HDFC Bank. HDFC Bank will independently compute the daily NAVs of these schemes which will be in turn posted on the Sahara Mutual Fund web site along with other regulatory disclosures.’’

Additionally, Sahara Mutual Fund is also evaluating the possibility of launching an offshore fund in line with its strategy to play an active role in the key global markets.

Commenting on the investment strategy of the Sahara Wealth Plus Fund, Naresh Kumar Garg, chief investment officer of Sahara Mutual Fund said: “The new Sahara Wealth Plus Fund will identify companies for investment, the three year average Return on Equity (ROE) of which is at least twice the annualised yield for 5-year Government of India (GOI) Security as at the close of 31st March of the previous financial year. These companies should also have a minimum market capitalization of Rs. 100 crores (Dh84.88 million) at the time of investment.’’

There is no entry load for investments above Rs5 crore (Dh4.24 million) in the Sahara Wealth Plus Fund while a load of 2.25 per cent will be levied on investments less than Rs1crore (Dh848,000) and 1.75 per cent for investments between Rs1-5 crore.

There will be a three-month 1.00 per cent exit load for investments over Rs5crore. The scheme also offers a Systematic Investment Plan (SIP) at the New Fund Offer stage itself. Under this plan, investors choosing to invest a specified amount at monthly or quarterly intervals, will not be charged any entry load. However, if an investor chooses to exit from the SIP investment on or before the expiry of 365 days, an exit fee of 2.25 per cent will be levied.

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