Financial Daily from THE HINDU group of publications
Tuesday, Dec 30, 2003
Financial Daily from THE HINDU group of publications Tuesday, Dec 30, 2003 |
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Markets
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Mutual Funds Tech funds take a new avatar Veena Venugopal
Mumbai , Dec. 29 TECHNOLOGY funds, the toast of 2000, are the laggards of the MF industry this year. Consequently, these are now being re-invented as global India funds — funds that will invest in Indian companies that have potential to be globally competitive and have high export earnings. IL&FS eCom Fund and Chola Freedom Technology are now IL&FS Global India Fund and Chola Opportunities Fund, respectively. These and the recently launched Kotak Global India Fund will invest in sectors where Indian companies are globally competitive such as pharmaceutical, auto/auto ancillary, engineering, textiles, BPO, etc. The new investment mandate allows funds to invest in diversified scrips and choose a mix of mid-cap and large-cap stocks to optimise returns. Mr Sandeep Raichura, Head of Research and Marketing, Chola Distribution Services, says none of these funds has a unique positioning in the market and the asset management companies (AMCs) are merely seeking a wider investment benefit by positioning themselves as global Indian funds. The universe of globally competitive Indian companies, though larger than it was two years ago, is still not large enough to afford cherry-picking by fund managers. While industry watchers feel that these funds are good medium-term investments, they are a wary of the timing of the launch of these products. "There is definitely an element of cashing in on the feel-good factor that is now prevalent in the economy and markets," asserts Mr Raichura. Mr P.V.K. Mohan, Fund Manager (Equity), IL&FS MF, counters that there is no question of riding the crest of the feel-good wave, as this was clearly an opportunity that was waiting to be capitalised on. The export advantage that was the domain of software companies has now been extended to other sectors as well, he says. AMCs are positioning these funds as an opportunity for investors to participate in the economic growth of India. Mr Sandeep Shah, Retail Sales Head of a distribution company, concedes that retail investors are not fully informed about the product and the current inflow of investments into these funds are primarily because they are newly launched and hence at lower NAVs in comparison with other diversified equity funds in the market. Mr Vineet Potnis, Chief Marketing Officer of Cholamandalam AMC, admits that this product may be in line with the MF industry's tendency to launch flavour-of-the-month products, but believes that there is a long-term potential for high returns in the fund. Whether global India funds will go the same way as their predecessors, technology sector funds, will be something that industry watchers will be keenly observing.
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