The understanding for the NFO of Stanchart is grossly wrong. No one ever wrote or discussed that at any point of time even if the entire 100% of the asset are applied in IPOs, still 90% goes to NIFTY. This is because MF pays only 10% margin mony for the amount they applied. MFs cannot apply for more than their AUMs in all IPOs taken together. As maximum 10% goes in IPOs(even though the application size is worth 100% of the AUM); the remain 90% will always always remain invested in NIFTY(index of top 50 companies with inbuilt diversification)for 3 long years. Who says now that the fund will make short term investments?? If you still wants to understant this, give send an e mail at investwise123@rediffmail.com but please do not write anything which you do not understand.
