The Hindu Business Line : Update

In a major relief to mutual fund houses, the Finance Minister has clarified that the entry and exit load charged from investors by mutual fund would not attract service tax under the category of fund management.

The Cabinet Committee on Economic Affairs on Thursday referred the issue of allowing state-owned companies' reserves to invest in mutual funds to a Committee of Secretaries (COS). Currently the PSUs are parking their surplus funds in fixed deposits of nationalised banks, RBI bonds and treasury bills.

SBI Mutual has launched SBI Infrastructure Fund Series I, a three-year close-ended growth fund, to invest in the equity of diversified basket of companies directly or indirectly involved in the country's infrastructure growth and in debt markets.

The fund will invest a minimum of 65 per cent in equity and equity-related instruments, including derivatives and the balance may be invested in a mixture of debt and money markets instruments. The fund may also invest up to 10 per cent of its corpus in private equity or unlisted stocks of companies in the infrastructure space.

The NFO opened for subscription on May 11 and closes on June 8. The minimum investment for the scheme is Rs 5,000.The fund will have growth and dividend option with re-investment and payout. The fund will not charge any entry or exit load during the NFO. The fund is benchmarked against the BSE-100 and will be managed by Mr Jayesh Shroff.

Lotus Mutual has announced that there will be no entry load on investments made through a systematic investment plan (SIP) on Lotus India Contra Fund starting May 15. In addition to this, the minimum SIP amount has also been brought down to Rs 100 a month.

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