Bharti AXA Tax Advantage Fund Floats On - Dec 16, 2008

Bharti AXA Mutual Fund has launched the initial offer period of Bharti AXA Tax Advantage fund on 12 December 2008 till 12 January 2009. It is an open-ended equity linked saving scheme. The face value of the new issue is Rs 10 per unit.

The scheme seeks to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities across all market capitalizations. The scheme is in the nature of diversified multi cap fund.

The scheme will offer two plans viz. eco and regular plan with growth & dividend options. Dividend option will further offer dividend payout and reinvestment facility.

Eco plan is available for purchase transactions of up to Rs 2 lakh only. Where the value of any purchase transaction is greater than Rs 2 lakh, then such investments can be placed only in regular plan. Both plans will have common portfolio.

The scheme seeks to collect a minimum corpus of Rs 1 crore during NFO period. The scheme will invest 80%-100% in equity and equity related securities with high-risk profile. It will invest up to 20% in debt and money market securities. Investment in derivatives instruments may be made only if permitted under ELSS rules and SEBI regulations. Investments in derivatives instruments may be up to 50% of the net assets of the scheme. The scheme will not make investments in securitised debt. It may also engage in stock lending.

The scheme will levy entry load of 2.25% for investments less than Rs 2 crore in regular plan and nil for the purchase amount equal to or above Rs 2 crore. Under eco plan the scheme levy entry load of 2.25%. Investments through Systematic Investment Plan/ Systematic Transfer Plan (SIP/STP) will also attract 2.25% an entry load.

The scheme will not charge any exit load. As per the ELSS Rules, unit holders will not be able to redeem units under the scheme for a period of 3 years from the date of allotment of respective units. After the period of 3 years, units could be redeemed. Individuals and Hindu Undivided Family (HUFs) would be entitled to claim deduction under section 80C in respect of subscription to the units of the scheme. The aggregate amount deductible under section 80C in respect of subscription to the units of an equity linked savings scheme and other prescribed investments is restricted to Rs 1 lakh.

The performance of the scheme is being benchmarked to the performance of S&P CNX Nifty Index. Prateek Agrawal will be the fund manager for the scheme.