The Hindu Business Line : Will it be a green turf for Fidelity?

FIDELITY, the giant US fund house, expects to flag off its Indian venture with a diversified equity product. Or so indicates Ms Ashu Suyash, head of its local operations. The other day, one had the opportunity of watching a very interesting presentation by Ms Suyash and expectations have been sky high since then.

The market in India would want Fidelity to do a lot of things correctly. Or even differently, given some of the trends that have been thrown up by the fund management industry in recent years. However, first and foremost, the investment fraternity here would expect it to be completely true to its clients. Establishing a good team of professionals would be a major issue. The team would be expected to perform well on all counts - fund management, product development, administration, distribution, investor servicing and the like.

Fidelity, it is further hoped, should emerge as an ethics-driven, technology-oriented fund house, complete with an assortment of products and services. In fact, Ms Suyash's presentation led me to believe that technology would be an even bigger driver for the entire investment management business in the days ahead.

On another front, while no one expects Fidelity to line up numerous products in the early days, the need to extend the range would be felt eventually. It would have to face stiff competition from a set of strong players, including foreign majors like Templeton MF and bank-sponsored outfits like HSBC MF. Besides, there are well-known and well-entrenched names like UTI MF, HDFC MF and Tata MF.

At the beginning, it would have to operate under tremendous pressure - there would be many watchful eyes. Would Fidelity prove to be a serious player in such tough circumstances? Would it explore new distribution channels? Would it succeed in introducing best practices? Only time would tell.

Going by the Web site put up by the fund in the US, Fidelity currently offers various stock, bond, money market and asset allocation products. Each category of schemes has different investment objectives and investors can choose from a considerable array. The list is actually quite impressive, more so when you compare it with the relatively modest variety offered by asset management companies in India.

And if you are a more discerning investor, you may feel like checking out Magellan Fund, which has been closely followed by investment circles. The Fidelity site talks about its strategy and the way it invests in stocks, both value and growth. The idea is to use what has been described as "fundamental analysis of each issuer's financial condition and industry position and market and economic conditions".

However, whether you eventually become a Fidelity aficionado or not, you still need to appreciate a few simple rules of the game. Please remember, for instance, there is no alternative to discipline and commitment. There is merit in investing regularly and consistently. Yet, the value of your investments could change in response to many factors; do not overreact in haste simply because they are going down.

In fact, Fidelity would do well if it can pass on such simple messages to investors. At the end of the day, it would be a great service.

Feedback may be sent to nilanjan@thehindu.co.in

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