Investment Policy Of The Scheme Essay

Investment Policy Of The Scheme Essay

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The first offer documents of the schemes launched by LIC MF in the year 1989 do not contain any information about the investment policy of the schemes. The funds were mobilized without stating where they are going to be invested. During 1990 and 1991 the offer documents contained a few words on investment policy of the schemes. Unfortunately, these are worded in such a style that an investor cannot get a fair idea about the actual deployment of his funds. For example, Dhanavarsha (2), (3) and (4), Dhanashree 91 and Dhanalakshmi Scheme of LIC Mutual Fund launched during the period 1990 and 1991 states:
“Efforts will be made to carry maximum rate of return by investing the funds in permitted instruments in capital market. There is also the possibility of reasonable capital appreciation by the end of the scheme period.”
These are merely descriptive and generalization cannot be drawn out of these statements. It can be stated that the offer documents of the LIC MF schemes commenced during 1989 and 1991, do not contain neither the proposed deployment of funds nor the types of securities in terms of return and risk. Thus, the essential components of the investment policy are completely, ignored by the LIC MFs. Since 1992, the LIC MFs started disclosing about their investment policy by adding an element of objectivity. SEBI also made compulsory on the part of mutual fund to include the following statement in the offer documents.
“Mutual Funds and securities investments are subject to market risks and there can be no assurance or guarantee of returns by the trustees sponsoring institutions. The returns mentioned are not guaranteed but only indicative, based on the investment policy of the fund.”
The above statement is a highly ...


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...apital growth by investing mainly in mix of equity instruments. The investment portfolio of the scheme will be constantly monitored and reviewed to optimize capital growth. The basis and policy investment underlying this scheme is to invest in equity and equity related instruments and a small portion in debt and money market instruments.
Dhanasamridhi launched on 21st July 1944 as a five year close ended and pure growth oriented scheme was made an open ended scheme from 1st September 1999 and renamed as LIC Nomura MF Growth Fund with dividend options and growth options. Under dividend option investor can choose either dividend payout or dividend re-investment. This scheme seeks to provide capital growth by investing mainly in equity instruments and also in debt and other permitted instruments of capital and money market. The investment portfolio of the scheme will

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