Alliance Amc Unveils Term Plans Umbrella

Alliance Capital Asset Management (India) Pvt Ltd, has launched Alliance Term Plans - an umbrella scheme offering a series of close-ended fixed maturity plans.

The investment objective of the scheme is to generate income and capital appreciation by investing 100 per cent of the corpus in a diversified portfolio of debt and money market securities, usually maturing in line with the time profile of the respected series/plans.

The scheme opened with the first plan under the 98-day series on August 1. Nikhil Johri, chief executive officer (CEO), Alliance Capital, said, "The Alliance term plan is tailor made for the institutional and the high net worth customers. Currently, we propose to launch the 98-days and 378-days series. Each plan under the series will invest in a distinct portfolio of securities with a maturity equal to or approximately equal to the redemption date of that plan. The time period of 98 and 378-days is structured to give the fund manager additional leeway in getting the best price for the security in order to offer our clients maximum returns on their investments."

 

The 98-day series will have a new plan starting every week on Wednesday with maturity of 98-days, while the 378-day series will have a new plan opening on the 21st of every month. Each plan of every series will terminate on maturity.

There is an exit load of 5 per cent on redemptions/ switch-outs prior to maturity of a plan. On maturity, an investor has the option to either redeem his investments or while investing, opt to switch maturity proceeds into an existing folio in Alliance cash manager, in the growth plan.

He may alternately switch to any other Alliance Capital schemes on maturity or reinvest in the next plan of the 98-day series.

The scheme is divided into units having an initial offering price of Rs 1,000. The entry load is nil, however, investments will be possible only during the initial offering period of a plan.

On maturity of a plan, units will be redeemed at the applicable net asset value (NAV). Redemptions/switch-outs prior to maturity will attract 5 per cent exit load on the applicable NAV.

During the initial offering period of every series and the plan, thereunder, the minimum subscription is 5,000 units, that is Rs fifty lakh or in multiples thereof.

The initial issue expenses will be borne by the asset management company (AMC). Total recurring fees and expenses of 60 basis point (0.6 per cent) per annum of average weekly net assets will be charged.

The minimum subscription amount targeted for the initial offer of each plan under the 98-day series is Rs 10 crore and under the 378-day series at Rs 25 crore. Any oversubscription will be also retained in full by the scheme.

Each plan within the 98-day and 378-day series offers investors two investment options, dividend and growth. The growth option will make no dividend distributions.

The scheme, in its dividend option, intends to declare dividends on the termination date of the respective plan. The NAVs for both the 98-day and 378-day series will be declared every week on Wednesday.