Tata Income Fund Turns Open-Ended

The Tata Income Fund will go open-ended in March 1998. According to a Tata Mutual Fund release, new investors can enter the fund at NAV, without load and an existing portfolio, giving them a high yield. They can also take advantage of double indexation if they join in March.

The fund, which was launched in April 1997 with an assured return of 15 per cent for the first year up to March 1988, will have no guaranteed return from April 1998.

According to sources at Tata Mutual Fund, the scheme was launched as an open-ended one. It was scheduled to go open-ended in 180 days after the launch.

 

However, special permission was sought from the Securities and Exchange Board of India to keep the scheme closed during the period of falling interest rates.

"The trustees of the fund thought it would not be possible to give an assured return of 15 per cent to new investors and at the same time do justice to initial investors if it allows new investors to come in. The fund was only open for repurchase facility. Since the interest rate scene has now improved considerably, we have decided to go open-ended again," the source explained.

The net asset value of the fund as on February 20, 1998, is Rs 10.66.

Tata Asset Management managing director, K N Atmaramani, said the commitment of 15 per cent dividend had been honoured mainly due to the fact that the fund had collected Rs 69.73 crore, which was placed last year in debt instruments, giving an average gross yield of around 17 per cent which after deducting the expenses and fees, earned a net return of above 15 per cent.

The fund calculates the NAV every Wednesday and therefore will be available to the investors to enter on the subsequent Thursday and Friday. The fund will reopen on March 2, 1998.