FIIs keen to invest in 'Micro Cap Fund': DSP Merrill Lynch

Kochi, May 7 (UNI) Launching its close ended 'Micro Cap Fund' in the Kerala market today, DSP Merrill Lynch said institutional investors particularly FIIs were showing increased interest in the segment.

Addressing a press conference here, Merrill Lynch Vice-President V Girish said the BSE Small Cap Index had registered a growth of 66.9 per cent during the past four years (2003-07), compared to a 56.5 per cent growth in the Mid Cap and 43.9 per cent in the BSE Sensex.

Stating that this was the right time to invest in a Micro Cap Fund, Mr Girish said most mutual fund portfolios were concentrating on higher Market Cap companies.

Admitting that taking meaningful exposure down the market capitalisation chain was difficult, Mr Girish said this was where a seasoned fund investor like Merrill Lynch, which had a wide research base, could help to invest money in small companies with a market capitalisation of less than Rs 1,500 crore.

Giving details of the Micro Cap Fund, the first of its kind from Merrill Lynch, he said the fund offer was open till May 25, 2007. It was a three-year close ended equity growth scheme that will invest in companies, which were not part of the top 300 companies by market capitalisation.

A minimum investment of Rs 10,000 for individuals and Rs five crore for institutions can be made.

The company was seeking to invite investments upto Rs 500 crore for the scheme as it did not want to dilute the investment focus. At the same time it wanted to maximise the returns for investors.

Stating that there was a vast pool of varied, under owned and under researched stocks, Mr Girish said investing in the right scrips could yield high returns for the investors.

Micro Caps were also in a position to scale up as capital was available for them, both from private equity funds and banks.

UNI