Fidelity to launch first fund on March 21

The US-based Fidelity Fund Management (FFMPL) will float its maiden mutual fund product Fidelity Equity Fund, an open-ended growth scheme, in the country on March 21.

The scheme would close for subscription on April 19, 2005, FFMPL head of business Ashu Suyash told reporters.

The scheme is aimed at generating long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities, Suyash said.

The mutual fund would charge entry fee (load) of 2.25% for investments less than Rs five crore and would levy exit load of 1% for redemptions from lump sum investments held for less than six months, Ashu said.

The scheme would contain a portfolio of about 75 stocks. While there are no restrictions on individual holdings, the fund manager would rarely allocate over 4% to one stock, ensuring diversification across companies, Ashu added.

Suyash did not elaborate on specific sectors that looked attractive for investment but said the MF would follow a bottoms up approach.

Asked if Fidelity was late in floating a fund in India, Ashu said Fidelity has been an active player as foreign institutional investor in India since early 90s and currently its assets portfolio here was worth $2.5 billion.

The strong economic growth, favourable demographics, better market and good corporate governance made Indian market an exciting place to do business, Ashu added.