| (From left) Fidelity Fund Management officials Ashu Suyash and Arun Mehra along with Fidelity Investments MD Richard Wastcoat and executive vice-president Rick Spillane in Mumbai on Tuesday. Picture by Hemant Mishra
Mumbai, March 15: The world's largest fund manager, with over $1.2 trillion in assets and 20 million investors across the globe, has arrived.
Fidelity Fund Management, the Indian arm of Fidelity Investments, today announced the launch of its maiden product for India ' Fidelity Equity Fund, an open-ended growth scheme. The initial public offer will open on March 21 and close on April 19.
The scheme is aimed at generating long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities.
Fidelity boasts of contacting a company every minute of every working day. Fidelity covers over 90 per cent of the world market capitalisation and its analysts compile over 27,500 company research reports each year.
For its India foray, Fidelity has joined hands with the Burmans of the Dabur group, who will own a minority stake of 25 per cent.
'We are excited about the launch of our first domestic offering. Strong economic growth, favourable demographic pattern, better market regulations and good corporate governance make India an exciting place to do business,' said Ashu Suyash, head of business, Fidelity Fund Management Private Ltd
'This is our first step towards building a long-term quality business in India. Fidelity Equity Fund is designed to be a core holding in an investor's portfolio as it aims to build a diversified range of stocks with strong growth potential, without any particular sector or market cap preference,' she added.
Fielding questions, especially on the timing of the launch as the markets are close to their peak, the managers said the fund believed in a long-term approach to equity investment.
'We don't focus on what the markets are going to do. We have fiduciary responsibilities to pick the right stocks. And at the end of the day, our job is to pick the best stocks available in the market,' said Richard Wastcoat, managing director of Fidelity Investments International.
In a clear move to attract small investors, Fidelity said it will be the first mutual fund in the country to offer a systematic investment plan (SIP) from inception with a minimum sum of Rs 500.
The mutual fund would charge an entry fee of 2.25 per cent for investments less than Rs 5 crore and would levy an exit load of 1 per cent for redemptions from lump sum investments held for less than six months.
The fund will be based on the conviction that each stock has the potential to grow in value and will not have any bias ' market cap, trend or recent performance.
The fund will be managed by Arun Mehra, who is heading the investments team at Fidelity Fund management.
'We at Fidelity believe that a good investment portfolio is built on one investment at a time,' Mehra said.
The Fidelity Equity Fund will contain a portfolio of about 75 stocks. While the fund has no restrictions on individual holdings, the manager will rarely allocate more than 4 per cent to one stock. Fidelity said this translates into a fund with solid diversification across a broad range of established companies, as well as smaller organisations poised for growth.
Research is the backbone of Fidelity's investment decisions. Fidelity has one of the largest research teams in the world comprising 480 analysts.