LIC MF to launch P/E ratio-based fund
Kolkata: The LIC Mutual Fund has lined up a P/E Fund for allocating chiefly to companies where P/E ratios are less than that of the Sensex or the Nifty at the time of investing.

The proposed fund will try to generate capital appreciation over the medium to long term. Selections will be made through the stock exchange where particular scrips meet the fundamental condition for investment. P/E ratios will be determined based on the latest closing prices and the EPS figures pertaining to the last annual results.

The fund, which will require an entry load of two per cent for investments less than or equal to Rs3 crore, will normally allocate at least 65 per cent to equities or equity-related instruments, including derivatives of companies where P/E ratio is less than that of the index at the time of making the investment.

Up to 35 per cent of the assets may also be put in stocks that do not satisfy the basic criterion - that is, in cases where P/E is more than that of the Sensex or Nifty. Also, a maximum 15 per cent may be invested in fixed-rate debt or money market instruments, the offer document filed with SEBI has stated.

For calculating P/Es, prices will be taken as the last available closing rates, LIC MF has specifically mentioned, adding that EPS will not be calculated based on quarterly results as such results may show variations because of the cyclical nature of the stocks involved.
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Mark Mobius: Emerging markets to face pressure
Mumbai: Mark Mobius, Managing Director of Templeton Asset Management, has said that the emerging markets may face pressure if the US treasury rates go up. While asserting that the hike in the US interest rates was not a bearish signal, he added that the spread between emerging and US markets bond rates would be crucial.

Mobius said Templeton is underweight on India compared to other emerging markets but they would increase their holdings if the Indian markets correct further. Speaking on the Indian stock markets, Mobius said IT and pharma stocks look expensive at the present juncture. Instead, he said he would look at FMCG firms as he expects the consumer market to grow.

Mobius said HLL and Tata Tea were his picks among the FMCG stocks. The fund manager said oil and gas stocks are not going to see much correction. He said his fund is invested in HPCL. Mobius said the consumer banking segment looks interesting to his firm. The Indian auto stocks were overpriced, according to Mobius.
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