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Our Bureau

Kolkata , Jan. 4

Sundaram MF is not the first to set pre-determined limits on asset-sizes. There are stray examples of fund houses doing this right at the beginning. In other cases, controls were placed by players that were concerned about serious increase in sizes of certain funds.

HSBC MF, for instance, launched its mid-cap fund in mid-2005 with a cap of Rs 700 crore, saying that such a limit would facilitate risk management and performance. It set an earlier closing date as part of this strategy.

Reliance Growth Fund had, in July 2005, announced suspension of sale of units, based on the view that "increasing the scheme's size further may prove detrimental to the existing unit-holders".

The step would be effective when the corpus became Rs 1,700 crore or on August 14, whichever was earlier, the MF mentioned.

Franklin Templeton MF had early last year set a 6-month suspension on Prima Fund.

Large short-term inflows, given the then market conditions, could be detrimental to investors, it was stated.

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