A rally in the Sensex, up 30 per cent since March 9, has brought back life into the sagging mutual fund business, with fund houses gearing for quick launches and filing offer documents with the Securities and Exchange Board of India (SEBI).
While ICICI Prudential launched its Target Return Fund only last week, fund houses have filed offer documents for six equity schemes since April 8, including three from Reliance Capital AMC.
But mutual fund managers say the rally has nothing to do with it.
“While things look much better now, we did not file the offer documents with SEBI because of the upward movement of the market as we started the process of filing when Sensex was at around 8,000,” said Sundeep Sikka, CEO, Reliance Capital AMC.
DSP BlackRock Mutual Fund has lined up two funds schemes — World Mining Fund and World Energy Fund — while Reliance Capital AMC plans Nifty and Sensex based index funds and a micro capital fund as well.
“We feel that there is a need for these schemes in our portfolio,” said Sikka.
Canara Robeco Mutual Fund plans to come up with Force Fund, which will invest in companies operating in the financial sector, retail sector and entertainment sector. The market fall seems to have brought learning and maturity in the fund houses.
ICICI Prudential’s Target Return Fund will allow investors to withdraw gains at pre-determined triggers at 12 per cent, 20 per cent, 50 per cent and 100 per cent. This means that if the trigger has been fixed at 20 per cent, the fund house will pull out the 20 per cent return as and when the scheme’s NAV hits the target profit of 20 per cent. The remaining amount will, however, remain invested.
While ICICI Pru has launched its scheme, it is cautious. “Though we have launched the scheme now, we will invest the money only after the elections,” said Nilesh Shah, deputy managing Director.