At Sahara Mutual Fund we truly practice the term ‘mutual'. For the first time ever in India , we are proud to launch a 'Variable AMC Fee' wherein the fee is linked with the funds' performance. For us 'Mutual' is not merely a financial word before fund, it is the concept that drives our business...this is what makes us 'Sach Mein Mutual' !

Variable Pricing Option

At Sahara Mutual Fund, we take the onus for our performance by linking it to the fee we earn. It is about building a long term relationship. One in which we remain 'Mutually Yours' over the years. That's why we offer the Variable Pricing Option.

How the Variable Pricing Option works

Under the Variable Pricing Option, the AMC fee earned depends on the scheme's daily performance.

The two conditions being considered for charging Investment Management & Advisory fees are :
(i) Net portfolio return (NPR) > Benchmark Return
(ii) Net Portfolio Return (NPR) > 0
The fees are charged accordingly, on the basis of whether at least one of the two conditions is met.

Where Net Portfolio Return( NPR) = Gross Portfolio Return(GPR) - Third Party expense

IMA= Investment Management and Advisory fees.

New Fund Offer period (July 4 to August 9, 2005 )

Objective: The scheme's primary objective is to invest in equity and equity related instruments of companies that will be wealth builders in the long term.

Benchmark : S & P CNX 500

New Fund Offer Price : Rs. 10/- per unit at par plus applicable Load

Minimum Application : Rs.1000/- with additional investment of Rs.500/- and in multiples of Re.1/- thereof.

Options available : Fixed Pricing option and Variable Pricing Option.

Scheme choices under both options: Dividend payout, Dividend Reinvestment and Growth option.

Load Structure:

Return on Equity (ROE)- The Core Idea

The return that a company gets on its equity is one of the most important factors in making successful stock investments. Return on equity (ROE) provides a useful indication of how well fund managers are employing the funds to generate returns.

We analyze companies and industries inside out before making investments. Studying their performance of minimum 3 years, we match them with our stringent and robust stock selection processes before we invest in them. We take a company's average ROE over 3 years for consistency and better reliability and compare it to the annual yield of a 5 year Govt. of India security as on 31st March of the previous financial year. The average ROE must be at least twice the annual yield. The companies should also have a market capitalization of at least Rs. 100 crores at the time of investment. Companies that do not show consistency in earnings may be avoided even though they post higher ROE. This is to ensure steady returns to our investors.

Currently there are around 3000 stocks that are traded out of more than 7000 listed on the bourses. Out of these 3000 companies, around 200 stocks currently qualify for investments under this scheme. This basket of around 200 stocks would undergo change often as more stocks, which qualify under our stringent selection criteria become available for investment.

Even though ROE forms the core idea, tools such as Economic Value Added (EVA), EPS, P/E etc and our extensive in-house research would be used concurrently for this Scheme's portfolio management.