The Trustees of DSP Merrill Lynch Mutual Fund have declared a tax-free dividend as follows:
Mumbai, February 25, 2008: DSP Merrill Lynch Fund Managers Ltd. today announced the launch of DSP Merrill Lynch Natural Resources and New Energy Fund, an open ended equity growth scheme investing in companies which form a part of the Natural Resources, Energy and New Energy sectors. A minimum of 65% of the scheme's corpus will be invested in Indian companies which form a part of these sectors. The scheme also has a provision to invest a maximum of 35% of its corpus in Merrill Lynch International Investment Funds – New Energy Fund and Merrill Lynch International Investment Funds – World Energy Fund and/or through securities of companies domiciled overseas and principally engaged in the sectors of natural resources and alternative energy. The New Fund Offer (NFO) will commence on March 3, 2008 and close on March 27, 2008.
Investment case for natural resources - The natural resources sector is in the middle of a super cycle with large amounts of capital being allocated to this sector. With strong growth in the levels of industrialisation and urbanisation in the emerging markets, the demand for natural resources is fast outpacing the levels of supply.
What are the drivers for growth in the demand for Natural Resources in India?
Consumption side:
- Rapid Urbanization
- Increasing income levels & rising affordability
- Positive demographics
- Easier availability of credit
Investment side: Physical Infrastructure creation gaining strong momentum
- Airports, Railways, Roads, Ports and Power
- Increased role of public-Private sector partnerships
- Private sector driving investment demand for Natural Resources
- Increasing focus on Special Economic Zones
Empirical evidence in the past shows that demand for natural resources surges within a few years of GDP per capital touching levels in excess of USD 3,000. Keeping this data as point of reference, India is at an inflection point with its GDP per capita in excess of USD 3,800 and at an estimated rise in the urbanization rate to 86% by 2030.*
Investment case for Energy & New Energy
The tightening of oil supply is likely to support price for oil and associated equities. This rise in price has also generated interest in the alternative energy sector. The Government's policy on climate change and energy security along with technological and operational advances has also helped drive interest in this sector.
Investors can give investments in this sector international exposure through the world renowned Merrill Lynch Natural Resources team.
The scheme also has a provision to invest a maximum of 35% of its corpus in Merrill Lynch International Investment Funds (MLIIF) - New Energy Fund and MLIIF - World Energy Fund. These MLIIF funds were launched in 2001 and are currently managed by Robin Batchelor and Poppy Allonby. The Merrill Lynch Natural Resources team is a market leader amongst the Natural Resources sector funds managing assets in excess of US$ 42.2 bn. **
Speaking to the media, Mr. S. Naganath, President and Chief Investment Officer said, The current rate of GDP growth witnessed in India and other emerging economies is likely to spur significant demand for Natural Resources and Energy. In addition the world is beginning to address concerns for the environment due to global warming which has resulted in increased interest in the areas of alternative energy. A combination of these factors makes the theme for natural resources, energy and new energy a sustainable investment theme for the long term.
Scheme Features:
Minimum Investment:
Regular Plan: Rs. 5,000/- and multiples of Re 1/- thereafter
Institutional Plan: Rs 5 crore and multiples of Re 1/- thereafter
Options Available:
Load Structure* for Regular Investments
| | Regular Plan | Institutional Plan | Systematic Investment Plan
(only in Regular Plan) |
| Entry Load# | For investments < 5 crore: 2.25%
For investments > = 5 crore: Nil | NIL | 1.00% |
| Exit Load | Holding period < 6 months: 1.0 %
Holding period > = 6months but < 12 months: 0.50%
Holding Period > = 12 months: Nil | NIL | Holding period < 2 years: 1.25%
Holding period > 2 years: NIL |
* IMF, Wikipedia, JPMC Research
** Merrill Lynch Factsheet, Data as on Jan 31, 2008, As per conversion rate on Jan 31, 2008: USD/INR = 39.39
# No Entry Load for direct investments.
Investment Objective: The primary investment objective of the Scheme is to seek to generate capital appreciation and provide long term growth opportunities by investing in equity and equity related securities of companies domiciled in India whose predominant economic activity is in the (a) discovery, development, production, or distribution of natural resources, viz., energy, mining etc; (b) alternative energy and energy technology sectors, with emphasis given to renewable energy, automotive and on-site power generation, energy storage and enabling energy technologies. The Scheme will also invest a certain portion of its corpus in the equity and equity related securities of companies domiciled overseas, which are principally engaged in the discovery, development, production or distribution of natural resources and alternative energy and/or the units/shares of Merrill Lynch International Investment Funds – New Energy Fund, Merrill Lynch International Investment Funds – World Energy Fund and similar other overseas mutual fund schemes. The secondary objective is to generate consistent returns by investing in debt and money market securities. Asset Allocation: 1. Equity and Equity related Securities of companies domiciled in India, and principally engaged in the discovery, development, production or distribution of Natural Resources and Alternative Energy: 65% - 100%; 2. (a) Equity and Equity related Securities of companies domiciled overseas, and principally engaged in the discovery, development, production or distribution of Natural Resources and Alternative Energy (b) Units/Shares of (i) Merrill Lynch International Investment Funds – New Energy Fund (ii) Merrill Lynch International Investment Funds – World Energy Fund and (iii) Similar other overseas mutual fund schemes: 0% - 35%; 3. Debt and Money Market Securities: 0% - 20%. Terms of Issue: Rs. 10/- per Unit plus applicable Entry Load (During NFO). Regular Plan: Rs. 5,000/- and multiples of Re 1/- thereafter, Institutional Plan: Rs 5 crore and multiples of Re 1/- thereafter. Load Structure and Expenses: Entry Load (Regular Plan): 2.25% (For Regular investments < Rs 5 crore during NFO and Continuous Offer); NIL (For Regular investments >= 5 crore during NFO and Continuous Offer); 1% (For SIP investments during Continuous Offer); Entry Load (Institutional Plan): NIL (During NFO and Continuous Offer). Exit Load - Regular Plan: For Holding period < 6 months: 1.00 %; Holding period >= 6months but < 12 months: 0.50%; Holding Period > = 12 months: Nil; Institutional Plan - NIL; For SIP investments (only in Regular Plan): Holding period < 2 years: 1.25 %; Holding period > = 2 years: NIL. Investors shall bear the proportionate recurring expenses of the underlying scheme(s) in which the Scheme will make investment, in addition to the recurring expenses of the Scheme. Investor Benefits & General Services: During Continuous Offer, sale (at Purchase Price) and redemption (at Redemption Price) on all Business Days (Redemption normally within 3 Business Days). SIP, SWP, STP (During Continuous Offer) available in the Regular Plan, Nomination facility available. (If the SEBI limit for overseas investments by the schemes of the Fund is expected to be exceeded, the NFO may be closed / subscriptions, switches into the Scheme (during Continuous Offer) may be temporarily suspended / SIP/STP into the Scheme may be terminated). Declaration of NAV for each Business Day by 10 a.m. of the next Business Day. Statutory Details: DSP Merrill Lynch Mutual Fund was set up as a Trust by the settlors, DSP Merrill Lynch Ltd. (DSPML) and Merrill Lynch Investment Managers LP, USA. Sponsors: DSPML, DSP HMK Holdings Pvt. Ltd. and DSP ADIKO Holdings Pvt. Ltd. (collectively) (Liability restricted to Rs. 1 lakh). Trustee: DSP Merrill Lynch Trustee Company Pvt. Ltd. Investment Manager: DSP Merrill Lynch Fund Managers Ltd. Risk Factors: Mutual funds, like securities investments, are subject to market and other risks and there can be no assurance that the Scheme’s objectives will be achieved. As with any investment in securities, the NAV of Units issued under the Scheme can go up or down depending on the factors and forces affecting capital markets. Past performance of the sponsor/AMC/mutual fund does not indicate the future performance of the Scheme. Investors in the Scheme are not being offered a guaranteed or assured rate of return or dividend. DSP Merrill Lynch Natural Resources and New Energy Fund is the name of the Scheme and does not in any manner indicate the quality of the Scheme, its future prospects or returns. The Scheme is required to have (i) minimum 20 investors and (ii) no single investor holding>25% of corpus. If the aforesaid point (i) is not fulfilled within the prescribed time, the Scheme will be wound up and in case of breach of the aforesaid point (ii) at the end of the prescribed period, the investor’s holding in excess of 25% of the corpus will be redeemed as per SEBI guidelines. For scheme specific risks, including risks related to investments in MLIIF – WEF, MLIIF – NEF and other similar overseas mutual fund(s), please refer the Offer Document. Please read the Offer Document and KIM (available at www.dspmlmutualfund.com/ISCs/distributors) carefully before investing.