The Hindu Business Line : Fund of Funds plans show signs of growth

FUND of Funds (FoF), the latest genre of products that have been allowed by the market regulator, is showing signs of growth, the latest numbers recorded by the Association of Mutual Funds in India (AMFI) have suggested.

The category boasted eight schemes as at the end of May, which collectively had Rs 749 crore under their management. These have been launched by a number of fund houses, including players such as Franklin Templeton, Prudential ICICI and Birla Sun Life. A few more, including one from Standard Chartered MF - the only fund in India with no equity scheme, are in the pipeline.

The country's asset management industry had Rs 1,54,018 crore with it, led by the UTI MF. The No 1 entity had Rs 19,073 crore under management as on May 31. The other big players were: Templeton (Rs 17,085 crore), HDFC (Rs 15,778 crore) and Prudential ICICI (Rs 15,181 crore).

The Rs 10,000-crore plus group also had Reliance MF, which ended last month with Rs 10,806 crore, reflecting a big increase in its asset base. Those that did not make the mark included Birla MF and Standard Chartered MF.

According to AMFI, a change in the shareholding pattern led to the reclassification of Tata MF and Principal MF. The former is now a private sector, predominantly Indian outfit, while the latter is a predominantly foreign-controlled joint venture. The schemes of SUN F&C incidentally were taken over by Principal with effect from May 15.

The total assets under management was mainly on account of income schemes, which together handled 42.6 per cent (or Rs 65,591 crore) of the aggregate. The contribution of growth, gilt and balanced schemes were 14 per cent, four per cent and 2.8 per cent respectively. Liquid schemes were obviously a big contributor — 35.7 per cent of the total, that is, Rs 54,993 crore.

The new schemes launched in May included a couple of products from Birla Sun Life (both variants of its existing MIP) and Benchmark MF's exchange traded fund based on the banking index. Reliance MF launched its power sector fund.