The Hindu Business Line : ING Group scheme bets on fund managers

FUND managers are set to regain the limelight with one mutual fund set to launch a fund that bets on them as opposed to investment in asset classes, which have been MFs' diet so far in the domestic market.

The ING Group is coming out with a scheme, the `Optimix Income Growth Multi Manager FoF (Fund of Fund) scheme' that focuses on investment managers with itself and at other funds to deliver strong results.

The draft prospectus of the new scheme, awaiting clearance by SEBI, says it is an "open-ended hybrid FoF scheme", where the investment style follows the Optimix Multi Manager investment process. (FoF invests in other mutual fund schemes and various securities of companies).

According to ING's Web site, "Optimix rigorously monitors economic conditions, financial markets and investment managers to ensure the portfolios are sufficiently robust to withstand market fluctuations." The emphasis is on investment managers. Schemes managed by high-profile fund managers, who have past record of giving high returns, are preferred, as per the Optimix investment principle.

What will happen when a fund manager moves out to other funds? Apparently, there is the possibility of money too moving with the manager.

Ms Kavitha Hurry, Managing Director & CEO of ING Investment Management (India) Pvt Ltd, said SEBI guidelines do not allow money to move after the fund managers. However, once rules are relaxed, Optimix would have flexibility to track the fund manager's move, she said.

According to her, Optimix would be a separate division of ING Investment Management in India. Though it would be the first multi-manager fund here, such schemes are popular in other developed markets, industry officials said.

Mr Sumeet Vaid, Chief Marketing Officer, Optimix, told Business Line that multi-manager funds can be managed through three processes namely fund of funds, manage the manager and multi-manager Portfolio Management Services.

To begin with, the Optimix product will use the fund of fund and multi- manager PMS processes for the Optimix Income Growth Funds. However, as the markets mature, Optimix will start managing the manager processes as well, he said.

Multi-manager funds, Mr Vaid said, have been the fastest growing mutual fund segment worldwide at 18 per cent in the past 12 months. Multi-manager products also constitute 5 per cent of the global mutual fund industry.

ING's Optimix schemes are very popular in Australia and other Asia-Pacific countries. "Optimix is the first open architecture zero brand bias multi-manager investment solution provider in India," he said.

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