The scheme will primarily invest in ING's existing Luxembourg domiciled fund thereby seeking to provide an Indian investor long-term capital appreciation and exposure to countries which are amongst the fastest growing economies in the emerging market space. The Lux fund will try and achieve this by investing primarily in stocks of companies based out of Latin American countries or stocks of companies deriving a majority of their revenues from Latin American economies.
Mr. Vineet K. Vohra, Managing Director and CEO, ING Investment Management India, said, "The emerging markets as a whole have held up fairly well considering that they are generally volatile than the US indices. All emerging countries have some political risk associated with them, some much higher than others. However, what makes Latin America so attractive is the stable government in place in the recent years and their pro-growth policies. This is one part of the backdrop that isn't always visible to investors, but it plays an important role in medium & long term stability."
Latin America is a lucrative market on account of infrastructure investments, robust domestic demand, strong private consumption & surging commodity exports due to increasing demand from countries like India and China. Valuations for most of the Latin American economies look attractive as compared to their counterparts in the emerging markets.
These economies are fundamentally strong and companies have been able to weather the recent credit crisis successfully thanks to solid balance sheets and access to local funding sources. Government coffers also have been in good shape as a result of the rise in oil and commodity prices, and prudent spending.
Latin American equity markets have put-in stellar performances in recent months even in the face of a global meltdown in equity markets. Over the last few months, MSCI EM Latin American Index has outperformed other Emerging Market Indices by comfortable levels. The Latin America region has been a better performer in the world than others. Brazil is now the largest emerging market in terms of market capitalization, surpassing even China and South Korea.
More From This Section
Latin American equity markets have a low correlation within the countries constituting the region and have correlation of 0.20 with India which makes it a good hedge and a important asset to be considered by every Indian investor in his portfolio.
Maarten-Jan Bakkum, Global Emerging Market Specialist, ING Investment Management Amsterdam, on the emerging opportunity commented, "We see good prospects for most Latin American currencies. Improved fiscal accounts and healthy current accounts have taken away most of the traditional risks associated with such economies. With foreign direct investment to the region strong for a while now and portfolio investments clearly on the rise, there is substantial upside potential for Latin American economies."
The Issue comprises units of Rs. 10 per unit plus applicable entry load during the New Fund Offer and at applicable NAV based prices plus applicable entry load upon re-opening. The minimum application amount is Rs. 5,000 and in multiples of Re. 1 thereafter. The minimum additional purchases could be of value Rs.1000 and in multiples of Re. 1 thereafter.
The fund is managed by ING Investment Management Luxembourg S.A. and sub managed by ING Asset Management BV.
The investors will have the choice of three options viz. Dividend Option, Bonus option and Growth Option. The load structure for applications received during NFO and on-going sales is as follows: For application below Rs. 5 crore --- Entry Load: 2.5%; Exit Load: Nil; and CDSC: 1% if redeemed within 180 days from the date of investments (date of allotment in case of NFO). For applications of Rs. 5 crore and above, there is no load. Systematic Investment Plans (SIP) is available during New Fund Offer periods well as in on going sales. The load structure for SIP would be the same as mentioned above. Each installment will be considered as a single application.
About ING Investment Management:
ING Investment Management believes in providing investors with the knowledge & opportunity to manage their future easily. ING Investment Management was established in India by ING Groep