Financial Daily from THE HINDU group of publications
Tuesday, Jun 06, 2006
Financial Daily from THE HINDU group of publications Tuesday, Jun 06, 2006 |
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Mutual Funds Markets - Mutual Funds Nilanjan Dey
Despite the declining stock market, its equity funds have not seen major losses and in one case has recorded 20 per cent-plus gains.
Kolkata , June 5 Prudential ICICI MF, which has emerged as the largest fund house in May surpassing public-sector rival UTI MF, attributes a significant part of the latest increase in assets to inflows into its short-term products, including the liquid fund. It also claims that, despite the declining stock market, its equity funds have not seen major losses and in one case has recorded 20 per cent-plus gains. Pru ICICI's liquid assets have shot up from about Rs 9,600 crore to roughly Rs 14,000 crore, a development that has propelled the asset management company to move up in the ranks. Smaller increases have also been recorded by its floating rate and monthly income plans. Investments in the liquid fund were the flavour of the season, the MF has pointed out even as it referred to the fact that the equity market has weakened considerably during the past month. The latter on Monday fell further, the drop in the Sensex being over 200 points.
Growth drivers
Mr Nilesh Shah, CIO of Pru ICICI, said the surge in liquid assets is because of a combination of several factors. "Industry is not ready to invest much in the slack season. It has generated quite a bit of cash in recent days, which will be deployed in the forthcoming busy season. This has now made its way into short-term funds," he mentioned. Significantly, the fund house partially attributes the development to the unstable equity market as well. "Stocks are volatile at the moment. Some investors are parking money in liquid funds now, with the intention of using SWP and SIP options. Hopefully, this money will enter equity funds again," Mr Shah added. The reference (SWP and SIP) was to systematic withdrawal and systematic investment plans. On the equity side, Pru ICICI MF's schemes such as Infrastructure, Discovery and Services recorded marked declines - by 14 per cent, 8 per cent and 13 per cent respectively over the April-end numbers. The ones that did not record such significant decline are Pru ICICI Power and Pru ICICI Dynamic. Among the schemes that have gained ground is Pru ICICI Emerging STAR, which ended the month with a 21 per cent gain. The scheme - the acronym stands for Stocks Targeted At Returns - closed May with Rs 955 crore, up from Rs 785 crore it managed at the end of the previous month.
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