Fidelity India launches Wealth Builder Fund

Fidelity International's Indian asset management company has launched Fidelity Wealth Builder Fund, an open ended fund of funds scheme, offering asset allocation options with three plans. The NFO will be open from January 14 to February 5, 2009. The fund will open for ongoing purchases and redemptions from March 2, 2009.
According to a company release, the fund manager will use a two-tier investment approach - asset allocation and fund selection - to invest in Fidelity's funds. The fund offers three plans with varying levels of exposure to debt and equity that investors can choose from depending on their risk appetite.
Under Plan A, the fund will invest up to 85% in debt schemes and around 15% in equity schemes. Under Plan B, it will invest around 30% of net assets in equity schemes and the remaining in debt schemes and under Plan C, the fund will invest at least 50% of the net assets of the Plan in debt schemes and 50% of the net assets of the Plan in the equity schemes.
The fund will offer growth and dividend options. A dividend is proposed to be declared, subject to availability of distributable surplus, on a quarterly basis under Plan A and Plan B. Under Plan C, the dividend may be declared by the trustee, at its discretion, from time to time subject to the availability of distributable surplus. The fund will have a custom benchmark for each plan created using the CRISIL Composite Bond Fund Index and the BSE 200 in the proportion of the split between debt and equity for each plan.

The fund has no entry load but an exit load of 1% will be applicable for redemptions within a year from the date of purchase. The minimum initial investment is Rs 5,000. Investors can invest in the fund even through the SIP route with a minimum amount of Rs 500 per instalment with the total of all instalments not being less than Rs 5,000. In addition, the systematic transfer and systematic withdrawal plans are also available.

Ashu Suyash, MD & Country Head - India, Fidelity International, said, "Asset allocation decisions can drive as much as 91.5% of investment returns variability, as studies have shown. In the current market conditions of heightened volatility, a fund like the Fidelity Wealth Builder Fund provides investors a convenient route to benefit from disciplined asset allocation. We are in an environment where attractive returns are likely in the bond market and there is potential for bear-market rallies in equities on the back of increasingly attractive valuations."