HDFC MF launches new long term equity fund

Mumbai: HDFC Mutual Fund is launching HDFC Long Term Equity Fund, a close-ended equity scheme with a maturity period of five years with automatic conversion into an open-ended scheme upon maturity.

The new fund offer for HDFC Long Term Equity Fund, which is currently on offer closes on January 27, 2006. The investor can choose to invest in both growth and dividend options of the scheme. During the new fund offer (NFO), Units will be available at Rs10 each. The minimum application amount is Rs.5,000 and in multiples of Rs1,000 thereafter.

The new fund's strategy is to build and maintain a diversified portfolio of equity stocks that have the potential to appreciate in the long run. Companies identified for selection in the portfolio will have demonstrated a potential ability to grow at a reasonable rate in the long term.

The company says that while the portfolio would focus primarily on a 'buy and hold' strategy at most times, it will balance it with a rational approach to selling when the valuation becomes too demanding even in the face of reasonable growth prospects in the long run.

Being a close-ended equity scheme with a maturity period of five years ensures that the fund managers have the flexibility to choose stocks with long-term perspective, thus maximising the chances of generating long-term wealth.

It has a nil entry load while the exit load for redemption / switch-out from the date of allotment: up to 12 months is 4%; with a I per cent reduction till 48 months, 0.5 per cent from 48 to 54 months and nil load there after.