Fidelity's ELSS

PS: You would have seen a full page ad in yesterday's Hindu about Fidelity Investments in the last page... Well, here are some more details about them...People who are interested in saving tax, please read

Fidelity Fund Management Private Limited today launched Fidelity Tax Advantage Fund - an open ended Equity Linked Savings Scheme (ELSS). The fund aims to generate long-term capital growth from a diversified portfolio of predominantly equity and equity related securities.

Ashu Suyash, Country Head of Fidelity’s Asset Management Company in India said: “Less than a year ago, Fidelity took its first step in India with the launch of the Fidelity Equity Fund and the confidence that investors have reposed in us is indeed gratifying. But we are well aware that to become a significant player, our suite of products has to answer the differing and distinctive needs of investors. With our ELSS offering, the Fidelity Tax Advantage Fund, we are embarking on a category building journey and hope to make a difference to individual savings in the country.”

ELSS funds offer investors the opportunity to save tax under Section 80C and what keeps them ahead of other tax saving options is their ability to harness the growth potential of equities. Arun Mehra, Head of Investment Strategy, Fidelity India and Fund Manager of the Fidelity Equity Fund and the new Fidelity Tax Advantage Fund said: “At Fidelity, we build portfolios from the ‘bottom-up’ - focusing on a company’s core strengths and on fundamental analysis - the basic variables that drive earnings and performance in the long run. This facet, of quality being the only discriminator, takes on an even greater dimension with an ELSS - where cash does not need to be held to service redemptions but can be directed towards investing in stocks that hold promise”

The Fidelity Tax Advantage Fund has a three-year lock-in period. Suyash added: “We believe it’s the key ingredient for success. In fact, it probably gives an ELSS its unique personality. On the one hand, it’s the smarter tax saver for the salaried customer. On the other, high net worth customers are hugely drawn to its wealth-building virtues. “

Much like it predecessor, the Fidelity Equity fund, which is already the largest equity scheme in India (as at November 30, 2005 according to www.amfiindia.com), the Fidelity Tax Advantage will diversify across about 80 stocks with not more than 4% in one stock. “Our research capabilities give us the wherewithal to go further than most companies to find investment ideas that have the potential to create wealth. We view the developments in India with optimism. The market is vast; there are over 600 relevant listed companies, no single sector dominates and the opportunity for wealth creation could come from anywhere”, Mehra added.

Fidelity Tax Advantage Fund also offers a Systematic Investment Plan (SIP) to investors who are looking for a tax break as well as an easy and affordable way to take advantage of the growth potential of equities. The NFO will close on 31 January 2006.

The minimum amount for lump sum investments is Rs 500 and multiples of Rs 500. The entry load is 2.25% for each purchase of less than Rs 5 crores. For amounts greater than or equal to Rs 5 crores or by an FOF or on dividend reinvestment, the entry load is NIL. For SIP, the minimum investment is six installments of Rs 500 each, i.e. Rs 3000. The entry load for SIP is 1.25%, which is applicable to each SIP installment. There is no exit load on both lump sum and SIP.

Fidelity Fund Management Private Limited is the Indian arm of Fidelity International Limited. Fidelity International Limited has offices in over 20 countries across Europe and Asia-Pacific. Fidelity International along with its US affiliate, Fidelity Management and Research Co., actively covers 95% of world market capitalization. Central to Fidelity’s success is a pioneering spirit, a commitment to innovation that sets new industry standards and an unmatched investment in research, talent and technology. Driven by an entrepreneurial culture, Fidelity is known to actively pursue investor education and distributor training, which it has also begun in the country.