The Hindu Business Line : Fidelity seeks to be `Indian' player

FIDELITY, the US mutual fund powerhouse, will kick off its operations in India with a diversified equity fund, following it up with other products, both on equity and debt side. It is now readying its operational set up in the country and recruiting people. The equity fund will represent Fidelity's first move towards becoming a serious, long-term player in the local asset management industry. It is aiming to become a large fund house, complete with a range of products appealing to investors carrying different risk profiles.

Ms Ashu Suyash, Head of Business at Fidelity, said the idea was to become an essentially `Indian' player, the strong US parentage notwithstanding.

"We have engaged only 13 people so far. There will soon be a full-fledged set up. We are here for the long haul," she told newspersons here on Saturday.

Fidelity will also become a member of AMFI, the body representing fund houses in India. Earlier, addressing a meeting organised by Assocham, the Fidelity chief compared the situations prevalent in the US and in India, arguing that the local asset management industry has sought to move up the maturity spectrum.

This has happened despite the volatility witnessed in the Indian markets, a fact that cannot be wished away, she felt.

Customer-centric technology will win the day for fund managers, Ms Suyash maintained, adding that such technology has boosted fund houses in the US as well.

She also listed a few key recommendations, all of which will be important for local players. Broadly, these are:

Increase the number of technology-driven platforms, ones that would make mutual funds available in an easier way;

Ensure that the customer proposition offers information, choice and convenience;

Increase scalability and reduce costs, especially relevant when retail investors assume greater significance.

To press for cheque-writing facility

Fidelity is likely to speak in favour of those who have supported the proposal to allow cheque-writing facility for money market funds. Cheque-writing, as certain quarters feel, may change the way these ultra short-term investment products are used in this country.

"Yes, we are in favour of cheque-writing," Ms Ashu Suyash told Business Line, while referring to the practice that is prevalent in a number of other countries. The US player, incidentally, is strongly against the use of mutual funds (except liquid/money market funds) by day traders.

Such use will add to transaction costs and harm the interests of serious, long-term investors. There is need to look at quick entry and exit strategies (for equity funds) from the point of view of the regulator, it is felt.