Read SEBI's circular at: http://www.sebi.gov.in/circulars/2006/cirimd01.pdf
Which was implemented from June 1st, 2006.
Only closed-ended funds can charge that 6% NFO expenses and amortize them over a period of time. Open ended funds should do so in the form of upfront entry load or bear it from their own pocket.
Thats why 'Closed Ended Funds' are favourites of Fund Houses.
HSBC Unique Opportunities Fund (HUOF) is a 3-year, close-ended equity fund that intends to invest in stocks of companies facing certain ‘out-of-ordinary’ conditions but have potential for long term growth.
Who is this Fund meant for?
This Fund may be appropriate for investors who have a long-term investment outlook and a higher tolerance for risk. It can be used to diversify ones’ portfolio.
Please read the offer document . Last date 22 Feb 2007.
Examples of ‘Out-of-ordinary' conditions
* Turnarounds/Recovery Situations - The turnaround of steel
companies like Tata Steel, Essar Steel, Steel Authority of India,
Jindal SouthWest etc. in FY 2003 and 2004. These companies turned
from a reported net loss or minimal profits to high profitability in the
next three years. This was because of increasing commodity prices
and internal restructuring.
• Financial Restructuring, Distressed Debt etc. - The turnaround of
textile companies. E.g. Arvind Mills turned from a reported net loss
to a profit in FY 2003 because of a significant financial restructuring
(conversion of debt to equity etc.). Similarly India Cements turned
from a net loss to profits in FY 2006 on account of a comprehensive
debt restructuring and infusion of fresh equity.
• M&As, Divestments, Spin-offs, Demergers etc. - The demerger of
Larsen & Toubro's cement business (Ultratech Cement) and
subsequent purchase of Ultratech by Grasim led to value unlocking
in all the three companies i.e. Larsen & Toubro, Ultratech Cement
and Grasim.
• Out-of-Favour Sectors/Industries - The banking sector was
‘undiscovered‘ and ‘out-of-favour’ till 2002. The introduction of the
SARFAESI Act in 2002 led to a re-rating of banking sector stocks.
The sector was subsequently amongst the best performing in 2003
• New Product/Business launches - Reliance Industries' launch of
the telecom business in 2002-03.
• Asset Plays - Bombay Dyeing's real estate value got unlocked as
the company announced plans to convert its textile mill land in
Mumbai into commercial/residential real estate.
• Unrecognised Growth Potential - Pantaloon and Bharti
Televentures were two companies whose growth opportunities
in the Indian markets were underestimated in organised retailing
and mobile telephony respectively. These two stocks are amongst
the better performing stocks over the last 4 years.
• Changes in Laws/Regulations/Technology etc. - The introduction
of the Electricity Act 2003 led to a re-rating of power equipment
manufacturers like BHEL, ABB India, Siemens India etc.
Which was implemented from June 1st, 2006.
Only closed-ended funds can charge that 6% NFO expenses and amortize them over a period of time. Open ended funds should do so in the form of upfront entry load or bear it from their own pocket.
Thats why 'Closed Ended Funds' are favourites of Fund Houses.
HSBC Unique Opportunities Fund (HUOF) is a 3-year, close-ended equity fund that intends to invest in stocks of companies facing certain ‘out-of-ordinary’ conditions but have potential for long term growth.
Who is this Fund meant for?
This Fund may be appropriate for investors who have a long-term investment outlook and a higher tolerance for risk. It can be used to diversify ones’ portfolio.
Please read the offer document . Last date 22 Feb 2007.
Examples of ‘Out-of-ordinary' conditions
* Turnarounds/Recovery Situations - The turnaround of steel
companies like Tata Steel, Essar Steel, Steel Authority of India,
Jindal SouthWest etc. in FY 2003 and 2004. These companies turned
from a reported net loss or minimal profits to high profitability in the
next three years. This was because of increasing commodity prices
and internal restructuring.
• Financial Restructuring, Distressed Debt etc. - The turnaround of
textile companies. E.g. Arvind Mills turned from a reported net loss
to a profit in FY 2003 because of a significant financial restructuring
(conversion of debt to equity etc.). Similarly India Cements turned
from a net loss to profits in FY 2006 on account of a comprehensive
debt restructuring and infusion of fresh equity.
• M&As, Divestments, Spin-offs, Demergers etc. - The demerger of
Larsen & Toubro's cement business (Ultratech Cement) and
subsequent purchase of Ultratech by Grasim led to value unlocking
in all the three companies i.e. Larsen & Toubro, Ultratech Cement
and Grasim.
• Out-of-Favour Sectors/Industries - The banking sector was
‘undiscovered‘ and ‘out-of-favour’ till 2002. The introduction of the
SARFAESI Act in 2002 led to a re-rating of banking sector stocks.
The sector was subsequently amongst the best performing in 2003
• New Product/Business launches - Reliance Industries' launch of
the telecom business in 2002-03.
• Asset Plays - Bombay Dyeing's real estate value got unlocked as
the company announced plans to convert its textile mill land in
Mumbai into commercial/residential real estate.
• Unrecognised Growth Potential - Pantaloon and Bharti
Televentures were two companies whose growth opportunities
in the Indian markets were underestimated in organised retailing
and mobile telephony respectively. These two stocks are amongst
the better performing stocks over the last 4 years.
• Changes in Laws/Regulations/Technology etc. - The introduction
of the Electricity Act 2003 led to a re-rating of power equipment
manufacturers like BHEL, ABB India, Siemens India etc.
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