Mutual fund corpus rises 16.48% to Rs 106,929 cr

UTI, however, witnessed an outflow of funds with the corpus falling from Rs 49,213 crore to Rs 44,255 crore. ‘UTI corpus declined as some of the monthly income plan schemes matured and the trust had to shell out more funds due to meet the shortfall in redemption. The problems in the US-64 scheme also added to its woes,’ said a fund manager.

A study by mutual fund ranking agency Value Research shows that the top 12 IT-dedicated MFs have in the last one year on an average—up to November 15, 2002—posted a return of 18.73 per cent. The study shows that on an average, IT-dedicated MFs have given a yield of 18.73 per cent. Debt funds during the same period, have posted an average return of 13.63 per cent with G-Secs MFs posting a return 15.58 per cent during the same period.

Birla IT notched the top slot with an annual return of 62.03 on a yearly basis, DSPML Technology.com came second 28.11 per cent and Kotak’s K-Tech at number three with 28.06 per cent. Among the worst performers for the period is Sun F&C Emerging Technologies with a negative return of 1.25 per cent.

Said an analyst, ‘In a highly competitive environment where debt dedicated mutual funds are riding on a high, thanks to the recent key rate cuts, customer benefits in the garb of innovations are being lined up to attract the attention of retail investors. MF players are in a constant pursuit to provide differential advantages with respect to customer benefits.’

HDFC Mutual Fund recently launched its ‘Any Time Mutual Fund’(ATMF) service — which allows investors to withdraw money instantly at any HDFC Bank ATM, and units equivalent to the same are then to be redeemed from three particular debt-dedicated schemes.

IDBI Principal Asset Management Company, which has approximately 80 per cent of its asset under management dedicated to debt schemes, introduced its ‘Recurring Investment Scheme’ under its ‘Systematic Investment Plan’, to make investing in MFs equivalent to operating a recurring bank deposit by introducing an individual passbook for investors. Fund managers say that high liquidity and active portfolio management based on a view-change on interest rates, transparency in operations, benefits gained due to interest rate movements and from pooled investments are positives, which make MF advantageous over traditional bank deposits. “In such an environment, bringing forth innovative investor services renew the faith of retail investors as regards investment in MFs and go a long way in winning the confidence of investors vis-a-vis depositing money in banks,” said a fund manager.

Debt funds are expected to offer more returns than those provided by alternative investment avenues in the same risk class. It is little wonder then that most players in the MF industry are bringing about product innovations more on the debt side where volumes are high.