The Hindu Business Line : Vying for uniqueness!

THAT the world of mutual funds is getting bigger is common knowledge. Chances are you will now get lost in a maze of products, pushed by asset management companies that are becoming more aggressive by the day.

The sheer variety of options spawned by the fund houses' desire to come out with new (and, at times, exotic) schemes, is enough to confuse the most serious investor.

A committed observer will, however, soon be able to spot a few names that are altogether different from the rest. There is, as such, as an observer will no doubt appreciate, a need to stay in tune with the unusual and the wacky - in other words, products that stand out in some way or other.

It is not too difficult to compile a list of the atypical cases that an investor may come across. While the purpose of this column is not to draw that list, a quick look at a select set of schemes may not be a bad idea. Each of these schemes has an exceptional rationale, enough to stir even the most disillusioned mind.

Birla Bond Index Fund can be considered right away for being the first of its kind. Here is a diversified income scheme tracking the Crisil Composite Bond Fund Index. Fund manager Satyabrata Mohanty has kept the average maturity around 4.2 years - we are referring to the September 30 figures here - and the MF claims that a low expense ratio will help generate above-average returns. Crisil has assigned a Triple-A rating to the scheme.

Principal MF's Global Opportunities Fund may be next in line, thanks to the exposure it can take to companies operating in US, European and Japanese markets. It appeals to those who are keen on the P&Gs and the 3Ms of the world. The scheme, however, may soon lose its unique status, given UTI's plans in this direction.

Talking of UTI, the one name that comes to mind is ULIP, which stands tall in terms of bulk and features. This mega-sized fund, flagged off by UTI way back in 1971, allows investors to get a tax rebate under Section 88 of the IT Act on the investment made each year as well as life insurance cover to the extent of the unpaid (but not due) targeted amount.

Franklin India Index Tax Fund also carries a certain special appeal. Its message is clear from the name it bears - tax benefit (complete with the standard lock-in period) as well as an index-based investing strategy. The benchmark chosen by the fund is the S&P CNX Nifty.

No list of this nature will be complete if we do not include a select group of funds with USPs that are particularly intriguing. One is referring to the likes of SBI Contra, DSP Merrill Lynch TIGER and Franklin India International Fund.

For all the variety that is expected to come about, there will not be too many options of their kind. Yet, the coming days will see a few smart innovations, such as a textile/pharma-oriented fund that has been conceived by one of the relative newcomers. But remember, we are not trying to endorse any of the schemes that have been cited. The idea is to simply draw your attention to some of the extra-ordinary schemes that together make our world of investments so fascinating.

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

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