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Fidelity India Special Situations Fund launched

Written by: Staff

Mumbai, Mar 28 (UNI) The Indian mutual funds industry today witnessed the entry of a new category of funds with the launch of Fidelity Fund Management's Fidelity India Special Situations Fund.

Addressing reporters here today, Fidelity Fund Management country head Ashu Suyash said the special situations fund is an open-ended equity fund that aims to deliver long-term growth by investing across the spectrum of Indian equities with a focus on companies in special situations.

Describing it as ''an aggressive fund that will strive to add higher alpha to the portfolio over the long-term through bottom-up stock-picking'', Ms Suyash said ''this fund should be an interesting style diversifier for investors''.

Special situations are out-of-the-ordinary situations that companies find themselves in from time to time such as in terms of business, stock price or both, Ms Suyash pointed out, adding that Fidelity found the present moment an opportune time to launch this fund.

''We have the necessary global expertise to manage this type of fund and besides, the Indian market environment is presently favourable for the launch of new products such as this one. The special situations fund will help in filling gaps in investors' portfolios,'' she added.

Pointing out that this fund would not chase momentum, Ms Suyash enumerated an illustrative list of special situations such as turnarounds or recovery situations which companies often find themselves in, under-appreciated growth, asset plays which is a scenario where companies sell at a significant discount to their underlying assets, launch of new products or new business streams, out-of-favour stocks which include unfashionable companies but with improving fundamentals and corporate actions.

''These situations present an investment opportunity to a fund manager who can foresee and interpret the implications of that opportunity early enough,'' she said.

The fund, which would have the BSE 200 as its benchmark, will hold around 40-to-60 stocks and valuations will essay a key role in stock selection and portfolio construction, Ms Suyash said.

The fund's new fund offer (NFO) will remain open from March 28 to April 26, and the minimum amount for lump sum investments is Rs 5,000 and multiples of Rs 1,000.

There will be an entry load of 2.25 per cent for each purchase of less than Rs 5-crore while for amounts greater than or equal to Rs 5-crore or by a fund of funds (FOF) or on dividend reinvestment, the entry load will be nil.

There is an exit load of one per cent for redemptions within the first six months for non-SIP investments.

The SIP option will be available during the NFO period with a mimumum six instalments and each single instalment for a minimum of Rs 500 totalling not less than Rs 5,000. ''There will be an entry load of 1.25 per cent for each purchase less than Rs one lakh and an exit load of one per cent for redemptions within two years for investments made through SIP,'' said Ms Suyash.

Presently, Fidelity runs a special situations fund in the UK, which, since its inception in 1979, has gone up 12,124 per cent while its benchmark returned 2,761 per cent in the same period.

In addition, Fidelity also runs the American Special Situations Fund (since 1980), Japan Special Situations Fund (since 1984) and the Asian Special Situations Fund (since 1994).


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