Pru-Icici Mf, Stanchart In Tie-Up

Pru-ICICI Mutual Fund (Pru-ICICI MF) has tied up with Standard Chartered Bank for launching Principal Protection Plan where investors have the satisfaction of being assured that their principal amount is not lost, while holding out the possibility of capital gains since the interest component would be invested in equity schemes of Pru-ICICI MF.

The amount mobilised is invested in term deposits in Standard Chartered Bank so that the investor is assured that his money is protected. The fund managers discount the future earnings value of the invested amount and calculate the interest which will be earned in the future and this money will be invested at the present moment in any of the Pru-ICICI equity schemes of the investor's choice. The idea is to take advantage of the current low valuations in the market.

Vikram Issar, head of wealth management at Standard Chartered, said that this was an extension of the bank's wealth management services wherein they were offering their services to third parties. Issar said that there would be no conflict of interest with Stanchart Mutual Fund, since the latter does not have any equity scheme in its portfolio.

"This is primarily meant for investors who want to invest in equities but do not want to be exposed to the high risks associated with it," Issar explained.

Issar said that they were looking at similar tie-ups with other mutual fund houses. But these fund houses would have to fulfill the criteria of having a banking relationship with Stanchart, should have the required depth in schemes and the back-office ability to manage funds.

Investors can choose from a variety of term periods ranging from one year to five years.

Investment in equity-related investments would range between 10 to 40 per cent of the portfolio, depending on the maturity period opted for by the investor.