Chola MF to launch Floating Rate Fund

Mumbai: Chola MF will launch its Floating Rate Fund, an open ended income scheme The fund will provide income consistent with the prudent risk from a portfolio substantially comprising floating rate debt instruments, money market instruments and fixed rate debt instruments swapped for floating rate return. The initial public offer (IPO) will open for subscription on August 17, 2004, and close on August 19, 2004. Subsequently, the fund will open for subscriptions and redemptions on an ongoing basis.

According to. Sashi Krishnan, CEO, Chola Mutual Fund, "Interest rate uncertainty in the system has increased. With the global interest rates and inflation moving up, yields in the domestic debt market have hardened. In such an environment, investors in a floating rate fund will be able to protect themselves from interest rate fluctuations

Chola Floating Rate Fund will invest at least 65 per cent of portfolio in debt instruments including securitised debt and up to 35 per cent in fixed rate debt instruments.

Units will be offered at Rs 10 during the IPO and the minimum application amount during the initial offer is Rs25,000 and any amount thereafter. The scheme will have both dividend and cumulative options.

Chola Mutual Fund has been promoted by Cholamandalam Investment & Finance Co Ltd, the financial services arm of the Rs52 billion Murugappa Group. Cholamandalam has a strong presence in vehicle financing, mutual funds, financial products distribution and general insurance. Cholamandalam AMC Limited, established in 1996, manages funds in excess of Rs13 billion through nine schemes with over 100,000 investors. The AMC offers the entire range of cash, debt and equity products. Chola AMC is present in over 17 locations and also has a strong distribution network in place.