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Thursday, Jun 27, 2002

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JM Mutual to seek rating of liquid fund

Nilanjan Dey

KOLKATA, June 26

JM Mutual Fund intends to get its liquid fund rated. An assessment by a rating agency will underline the scheme's objective of maintaining a certain credit quality, it is felt.

The MF has proposed to approach Crisil, which has already assigned the highest Triple A rating to its debt scheme, JM Income Fund. The latter is JM's flagship product, accounting for the bulk of its asset base of around Rs 1,200 crore.

The liquid fund, which currently has assets of over Rs 300 crore, has tried to sustain a consistent investment policy, Mr Prabal Nag, Head of Sales, JM MF, has said.

A rating from Crisil is expected to be seen by investors as an opinion from an independent source; it will not be a statement on the fund's intention or capacity to provide timely payments to unitholders. It will also not be a comment on the stability of the fund's net asset value in future, the MF has pointed out.

"Our latest launch, the JM Short Term Plan (STP), should help the liquid product find a better niche. JM High Liquidity will be used by investors who can stay invested for about a month or even less, while the STP will be taken up by those who have a 1-6 months' perspective," Mr Nag told Business Line.

The STP, incidentally, has a rather high minimum entry criterion of Rs 1 lakh. It will soon reopen for on-going subscriptions.

Meanwhile, the NAVs of JM High Liquidity Fund in the growth, dividend and daily dividend options stood at Rs 15.94, Rs 11.57 and Rs 10.04 respectively on June 25.

The latest Crisil ranking (related to the quarter ended March 2002) accorded to the liquid fund is `CPR-2'. The rating outfit's ranking of MFs, it may be mentioned here, is a `composite performance rank' (CPR) of schemes vis-a-vis their respective peer group in each scheme category.

The CPR covers open-ended schemes that have at least two years of information on their NAVs and have furnished full portfolio disclosures. The rank is based on such factors as risk adjusted return, NAV, portfolio diversification, liquidity and asset base.

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