Kothari Pioneer To Launch Money Market Fund

Kothari Pioneer will shortly launch a money market mutual fund. The Money Market Account (MMA) as it will be called, would issue units of Re 1 face value on a continuous basis, both during initial issue and on an ongoing basis.

Being a no-load fund, the returns to the investor from the fund would be by way of bonus units issued through capitalisation of income and profits.

John F Cogan, trustee, Kothari Pioneer Mutual Fund (KPMF), said the money market scheme will offer ideal returns for investors who are looking for profitable options in low-risk investments. The investments would essentially be at the short-end in 90-day treasury bills offering high security and easy liquidity.

 

Competing with the commercial banks 30-day deposits, the fund would be able to give investors a higher yield at around 12 per cent. The Kothari Pioneer MF offers a total of nine schemes to investors of which six are equity-linked.

Addition of the debt fund and the fixed income fund allows an investor to shuffle his investments easily between various schemes at no additional cost depending on the market conditions prevailing at that point in time. Meanwhile, with the launch of its pension fund on February 27, the Kothari Pioneer MF will be the first among private sector mutual funds to do so.

To be called the Kothari Pioneer Pension Plan, this will be an open-ended scheme with no-load.

Besides, it will invest purely in debt unlike its only other counterpart Unit Trust of India , where the Retirement Benefit Fund is a equity-debt fund.

According to Vivek Reddy, chief executive, ITI Pioneer Asset Management Company Ltd: The pension plan has a lock-in period of three years at a charge of 3 per cent of the net asset value.

The pension plan will offer two options to investors - dividend scheme and growth scheme.

Under the former scheme, dividend will be paid each year. However, under the latter, the investor will receive returns in the form of capital appreciation where at the time of redemption the investor will have to pay long-term capital gains.