BATCH 2019-24

FINAL DRAFT:

SUBJECT: Investment and Security Law

TOPIC- “DRAFT SCHEME OF FUND OF
FUNDS”

SUBMITTED TO: SUBMITTED BY:

DR. RAHUL NIKAM MUDIT BALIA

Associate professor Roll NO. 92121040003

Faculty of law, Marwadi University B.A. LL.B (Hons) (VII Sem)

 DECLARATION

I Mudit Balia guarantee that the work exemplified in this project, titled “DRAFT SCHEME OF
FUND OF FUNDS” is my own genuine work completed by me under the direction Dr. Rahul Nikam,
Faculty of Law, Marwadi University. The matter exemplified in this project has not been submitted for
the reward of some other degree/recognition. I assent that I have reliably recognized, offered credit
and alluded to the creators/researchers any place their works have been referred to in the content and
the body ofthe undertaking. I further guarantee that I have not maleficently plagiarized some other's
work,section, text. information, results, figures and so forth detailed in the diaries, books, magazines,
reports, papers, theories, and so on, or accessible at sites and encompassed them in this project and
neither quoted them as my work.

Signature of the Student

Date:
 SUPERVISOR’S CERTIFICATE

This is to affirm that the work encapsulated in the going project named” DRAFT SCHEME OF
FUND OF FUNDS” has been completed wholly by Mudit Balia under my direction and assistance
and that the applicant has satisfied the necessities of the guidelines set down for the satisfaction of
BA.LLB. (Hons.) Degree assessment throughout Investment and Security Law (Semester VII), Faculty
of Law, Marwadi University
 ACKNOWLEDGEMENT

I want to convey my gratitude to individuals, who have helped me most all through my task,be
itstraightforwardly or by implication. I'm generally thankful to my professor Dr. Rahul Nikam
who really propelled to do this assignment by giving this chance. Also a thank of mine goes to
my companion who assisted me finishing the assignment, where they all traded their own
fascinating thoughts, and caused me to acknowledge both the points of view to the issue and
alongthese lines made it conceivable to finish my task with all exact data. I wish to thank my
folks for their own help or consideration who roused me to head out in a different direction.
Last but not the least, I would likewise stretch out my appreciation to the individuals who
couldn't be referenced here yet all around assumed their part to motivate the drape.
 INTRODUCTION

A ‘Fund Of Funds’ (FOF) is an investment strategy of holding a portfolio of otherinvestment

funds rather than investing directly in stocks, bonds or other securities. An FOF Scheme of a
primarily invests in the units of another Mutual Fund scheme. This type of investing isoften referred
to as multi-manager investment. The essential characteristic of such mutual funds is that they are
maintained by highly trained professional portfolio managers. This ensures accurate market
predictions to a certain extent, minimizing the chances of loss.
These schemes offer the investor an opportunity to diversify risk by spreading investments across
multiple funds. The underlying investments for a FOF are the units of other mutual fund schemes
either from the same mutual fund or other mutual fund houses.
Fund of funds are generally better suited for smaller investors that want to gain access to a range of
different asset classes or for those whose advisers do not have the expertise to make single manager
recommendations.
About the Scheme:

ABC Prudential Silver ETF Fund of Funds. is coming with a Scheme of ABC global Fund of
Funds Scheme It is an open-ended scheme investing prominently in Silver. The Investment objective
of the scheme is to achieve long term capital appreciation from a portfolio investing predominantly
in shares/units of Vanguard Funds.
The Scheme offers purchases and redemptions of units on all business days on an ongoing basis at
NAV based prices when the Scheme Re-opens for ongoing transactions (after NFI).
 ABC PRUDENTIAL SILVER FUND OF FUNDS
(An open-ended scheme which will invest in units of ABC Prudential Silver ETF)

This Scheme is suitable for investors who are seeking:

• Solution for long term creation
• To invest in a fund of fund scheme for generating good results
New Fund Offer opens New Fund Offer closes

November 1, 2022 November 15, 2022

The AMC reserves the right to extend or pre-close the New Fund Offer (NFO) period, subject to
the condition that the NFO Period, including any extensions, does not exceed 15 days or the
maximum period permitted by SEBI.
Within 5 business days of allotment, the scheme will re-open for continuous sale and repurchase.

The investors can invest in the scheme by the following ways:

1) In the Units of ABC Prudential Silver ETF registered with SEBI and/or permitted by SEBI.
2) Money market instruments, such as commercial papers, commercial bills, treasury bills,
government securities with an unexpired maturity of up to one year, call or notice money,
certificate of deposit, usance bills, and any other similar instruments as specified by the
Reserve Bank of India from time to time; to meet liquidity requirements.
3) All types of debt securities which suits the investment objective of the Scheme.

As per the guidelines of SEBI any Fund of Fund cannot invest in any other fund of fund

INVESTMENT STRATEGY:
The Scheme will offer investment returns that are tied to the underlying scheme. The Scheme intends
to achieve its investment goal by purchasing ABC Prudential Silver ETF and Debt & Money Market
Instruments units. The AMC will make every effort to ensure that the returns of ABC Prudential Silver
ETF Fund of Fund replicate the returns generated by ABC Prudential Silver ETF and will not deviate
more than 2% on an annualized basis, net of recurring expenses in the Scheme.

The Scheme will invest in ABC Prudential Silver ETF directly or through secondary market.
Minimum application amount:
During NFO/During ongoing Offer period:
Rs 200/- (plus in multiple of Re. 2/-)
A minimum application amount is also required for switches made during the New Fund Offer period.
Minimum Additional Application, Including Switches:
Rs. 200/- and in multiples of Re 2/-

SIP

During NFO/ During Ongoing Offer Period:

· Daily, Weekly, Fortnightly, Monthly SIP$: Rs. 200/- (plus in multiple of Re. 2/-) Minimum

installments: 5
· Quarterly SIP$: Rs. 6,000/- (plus in multiple of Re. 1/-) Minimum installments – 3
The minimum amount of instalment mentioned is only applicable at the time of registration.

Benchmark Index
Domestic price of silver as derived from the LBMA prices

Exit Load
If the amount which is to be redeemed or is being switched out is invested for a period upto 15 days
from the date of allotment
• 1% of the applicable Net Asset Value;
If the amount which is to be redeemed or is being switched out is invested for a period more than
15 days from the date of allotment
• Nil
However, subject to a maximum prescribed by the Regulations, the Trustee shall have the
right to prescribe or modify the load structure with prospective effect.

Minimum Redemption Amount

Any Amount

RISK PROFILE OF THE SCHEME:

Scheme Specific Risk Factors:

• The Scheme would invest in silver and silver-related securities (s). As a result, the
Scheme's NAV will respond to changes in the price of silver. The Scheme's units are
proposed to be listed on a stock exchange, so their market prices would be affected by
general stock market fluctuations.
• Although units are proposed for exchange listing, there is no guarantee that an active
secondary market will develop or be maintained. Prices of units proposed to be listed and
traded may be influenced by a lack of liquidity in the secondary market, as these funds may
not be actively traded.
Risk of passive investment: The Scheme is not managed actively. A general decline in silver
prices may have an impact on the Scheme. Regardless of investment merit, the Scheme eventually
invests in Silver as an asset class. In declining markets, the AMC makes no attempt to take
defensive positions.

Market risk due to volatility in silver prices: The value of the Units is directly related to the value
of the silver held by the Scheme, and fluctuations in the price of silver may have a negative impact
on the investment value of the Units. Demand and supply, economic and political developments,
changes in interest rates and perceived trends in bullion prices, exchange rates, inflation trends,
market movements, movement/trade of silver that may be imposed by the RBI, trade and restrictions
on import/export of silver or silver jewellery, and so on are all factors that may affect the price of
silver. As a result, the investor may lose money as the price of silver fluctuates. Silver Exchange
Traded Funds are a new product, and their value may fall if unanticipated operational or trading
issues arise.

NAME OF THE FUND MANAGERS:

The investments under the Scheme will be managed Mr. Raman Saini and Mr. Asad Raza.

NAME OF THE TRUSTEE COMPANY:

ABC Prudential Trust Limited

PERFORMANCE OF THE SCHEME:

The Scheme is a new Scheme and does not have any performance track record.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Disclaimer: Unless otherwise stated, all figures and data in the document are dated. The AMC used publicly available
information, as well as information developed in-house, in the preparation of the material contained in this document.
Some of the information in the document was obtained from members/persons other than the AMC and/or its affiliates
and/or made available to the AMC and/or its affiliates. This document's information and materials are believed to be
from reliable sources. However, the AMC does not guarantee the accuracy, reasonableness, or completeness of any
information. We have included in this document statements / opinions / recommendations that contain words or phrases
like "will", "expect", "should", "believe" and similar expressions or variations of such expressions, which are "forward
looking statements." Actual results may differ materially from those suggested by forward-looking statements due to
risks or uncertainties associated with our expectations, including, but not limited to, exposure to market risks, general
economic and political conditions in India and other countries globally, which have an impact on our services and/or
investments, India's monetary and interest policies, inflation, deflation, unanticipated turbulence in interest rates,
foreign currency fluctuations, and foreign exchange fluctuations.
The AMC (including its affiliates), the Mutual Fund, the trust, and any of its officers, directors, personnel, and
employees shall not be liable for any loss or damage of any kind, including but not limited to direct, indirect, punitive,
special, exemplary, consequential, or otherwise, arising from the use of this material in any way\.