India's Rs7.6 trillion mutual fund industry, seeking ways to counter a ban on entry loads they charged customers to pay for marketing and distribution costs, is bringing back closed-ended schemes that lock in investments for a predetermined tenure. At least two fund houses have won regulatory approval to launch three tranches of such schemes each in the next couple of months. Birla Sun Life Asset Management Co. Ltd and IDFC Asset Management Co. Ltd are marketing the schemes as investment plans aimed at protecting capital. Franklin Templeton Asset Management (India) Pvt. Ltd, which has been offering such schemes, currently has a similar plan open.

In a closed-ended fund, investments can be made only during the new fund offers (NFOs) and no new investor can apply to buy mutual fund units once the it closes. These funds have a fixed tenure and investors can liquidate their investments only on maturity. Although these schemes are listed, they are illiquid, making withdrawals difficult and expensive. An investor cannot easily withdraw money in an emergency. Also, the investor can't book profits and get out of the scheme even if he or she takes a view that the markets have peaked.

This scheme is a Close Ended Income scheme. The new fund offer starts from 8th March 2010 to 15th March 2010.