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Virendra Verma

BoB Mutual Fund is undertaking several steps including strengthening the distribution network to have a wider reach, under the leadership of new Managing Director, Mr N.L. Khurana, who took charge of the fund in May this year. The fund launched two schemes — balanced and growth — recently that garnered over Rs 60 crore taking the total corpus of the fund to over Rs 300 crore. In an interview to Business Line, Mr Khurana speaks about the future growth plans of the fund.

In a mutual fund business, the key to reach to the investors is the distribution network, what is the current network of the fund and future plans?

Till now, our focus was mainly in cities such as Mumbai, which contributed most of the funds inflows. But now, we want to reach more cities, and for this, we are opening our branch offices in cities such as Delhi, Chennai and Bangalore. Recently, we used the branch network of Bank of Baroda as collection centres and in future we intend to utilise the branch network of the bank on a much wider scale.

Could you tell us how you will be using the branch network of Bank of Baroda?

The bank has over 4,500 braches across the country and we are in the process of recruiting people who would be either employee of the fund or taking people who can be our franchisee, to interact with the customers of the bank who can or intend to invest in the our schemes.

To reach out to investors, a fund should have boutique of schemes, catering to different investors. Can you tell us where does BoB MF stand in comparison with other mutual funds?

After the launch of a balanced and growth schemes, the fund has a full gamut of schemes suitable to all kinds of investors. Now we have scheme for an investor who want exposure in equity market (growth scheme), then the fund has a balanced scheme and a liquid fund, short-term plans, gilt fund.

Is there any plan to launch more schemes?

Yes, we are intending to come out with Equity-Linked Saving Scheme (ELSS). In addition, we plan to come out with a scheme targeted towards NRIs. However, all these plans are in the initial stages.

Could you tell us about the fund's investment strategy while investing in the equity market?

The fund follows both the top-down and bottom-up approach in picking the stocks. Initially the fund selects the industries that have growth potential and that select the companies. In the bottom-up approach, we look at companies that are under restructuring and companies that have good research and development.

Which are the sectors you think have potential for good returns?

Some of the sectors that are of interest to us include pharmaceuticals, IT training and automobiles (commercial vehicles).

Stock prices are at yearly highs and have provided good returns in the last six months. What is your outlook on the equity market from these levels?

The outlook for the equity market looks good over the next few quarters. This is mainly due to the exceptionally good monsoon, good economic fundamentals and an air of optimism all around. While commodities and manufacturing have taken the lead in turning around the business cycles, we feel that the services sector will actually power the economy.

Where do you see the interest rates heading and the returns from the debt schemes?

Over the next few quarters, we are likely to see softer interest rates. However, the fall in interest rates will not be very fast. On the returns from the debt schemes, I do not see very high returns as seen over the last two years. Some stability has to be there in terms of returns now.

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