Concerned with the unusual price rise, the AMC issued a notice in leading papers last week, informing the investors about it. The advertisement clearly stated, "There is no reason for the listed price to quote at such a significant variance as compared to the underlying NAV."
Suresh Soni, chief investment officer, Deutsche Asset Management, said that there was nothing to support such a rise. "Once the fund is listed, it's for the investors to decide the price," he added.
The fund is still trading at Rs 13.90 or 39 per cent higher than the listing price despite the actual returns of only 2.05 per cent. Consider this, DWS fixed term fund - 43 is a three-year close-ended debt fund. It will mature in March 2011.
Close-ended funds are normally listed to provide liquidity to the investor, if they want to exit. They list at a discount because of this very reason. This rise in the NAV is only observed when such funds approach maturity.
Also, the returns of such funds are at a nominal rate of 10-12 per cent a year. So, there could be no possible reason for a 100 per cent rise in the NAV. "A fair value of the scheme should have been Rs 10.1," said a certified financial planner.
Dhirendra Kumar, CEO, Value Research termed such transactions as