Religare PSU Equity Fund is an open ended equity fund whose NFO begins on 29th September 2009 and closes on 28th October 2009.
As the name suggests, Religare PSU Equity Fund will invest in stocks of public sector companies in India. These are companies where the central or state government has the majority stake, or where it has the management control.
Minimum application amount of Religare PSU Equity Fund
The minimum application amount for this NFO is Rs.5,000 and you can invest in multiples of Re. 1 after that. There is a growth and dividend option for this plan.
Entry and Exit Load of Religare PSU NFO
If you apply directly to the NFO, then there is no load. However, if your application goes through a distributor / agent / broker and your application is less than 5 crores, then you need to pay an entry load of 2.25%.
If you redeem within six months of allotment then you have to pay an Exit load of 1%. There is no exit load if you redeem an amount greater than 5 crores, or if you redeem after 6 months.
Recurring expenses of the mutual fund
Here is how expenses will be charged to investors:
- First Rs. 100 crores: 2.50%
- Next Rs. 300 crores: 2.25%
- Next Rs. 100 crores: 2.00%
- Over Rs. 700 crores: 1.75%
Asset allocation of Religare PSU Equity Fund
This fund primarily looks at investing in stocks of PSUs, and that is where the bulk of your money will go. However, the fund can also invest in non PSU stocks and debt instruments. Here is an indication of how the asset allocation of the fund would look like:
|Equity and related instruments of constituents of BSE PSU Index||65%||100%|
|Equity and related instruments of PSU companies other than the ones in the Index||0%||35%|
|Equity and related instruments of non PSU companies||0%||20%|
|Debt and money market instruments||0%||35%|
One look at the table above shows you that at any time, a large part of the MF will be invested in PSU stocks. So, you should only buy into this NFO if you are convinced of the Indian PSU story.
How to apply for the NFO?
You can apply through a broker, or you can apply by filling up your application form and submitting it to an appointed bank branch. Here is a PDF link which has a list of all the applicable branches. You can find it on page 2 in a super small font. You can just increase the zoom and look for a branch which is nearest to you. Iâ€™d recommend calling up before hand before actually getting to the branch just to be on the safe side.
Since this is an equity fund, it has all the risks that stocks face in general. There is no guarantee of any returns and no capital protection also.
This is a mutual fund designed for people who believe that the PSU sector in India presents a good opportunity to investors. If you believe in that theme, then this is a mutual fund that can help you participate in that sector.
Disclaimer: As always, this is not a buy or sell recommendation, just a list of the salient features that will help you decide whether the investment is meant for you or not. This site has plenty of investment and finance related ideas – and if youâ€™d like that content by email — click here.