The Hindu Business Line : Key points behind MFs' asset base

Another month, another set of numbers and yet another group of winners and losers. A routine matter for casual observers, a boring subject for most investors and a regular story for journalists on the mutual funds beat. And that, of course, is just one way of looking at it, especially considering the figures released just the other day.

We are of course referring to the assets managed by the 30 or so fund houses operating in this country, specifically to what they had at the end of January and the manner in which the scores have changed since December 31, 2006.

The figures, it can be argued very successfully, will simply keep on changing every month. Why, therefore, should you bother too much about them?

The point is, the latest league table will always tell a new tale. Anyone interested in the funds industry will want to know the most recent position and compare it with what had prevailed earlier. More often than not, lots of other tiny aspects of the industry will come to light, courtesy the most up-to-date trends.

Here are a few sidelights, derived from the end-January scorecard. While some of these may entertain, the others, we are sure, will appear as interesting pointers - little nuggets of information.

Bank of Baroda-promoted BOB MF has quite a few midget-sized funds. Its Baroda Global and Baroda Growth have ended the month with roughly Rs 15 crore and Rs 10 crore respectively. Baroda Children is probably the smallest fund in its class; the study plan has Rs 1.21 lakh and the gift plan Rs 2.95 lakh.

Most tax-saving funds (ELSS, in other words) have low asset bases. Funds managed by Reliance MF, Fidelity MF and SBI MF are among the exceptions. These stand out in an arena that is increasingly becoming crowded.

Ditto for index funds. The average index chaser, in fact, seems to be in a miserable state, given the kind of money it manages. Funds managed by Tata MF, Principal MF and Canbank MF are in this list.

The largest products are on the debt side. This, of course, is not new. Short-term funds have always been favoured by institutional investors. Examples of super-sized funds abound - all well-known names - and there is no point in naming these at this juncture.

Reliance MF, which has emerged as the No. 1 player with over Rs 39,000 crore under management, has thrown up quite a few champs. As on January 31, 2007, Reliance Regular Savings Equity has turned out as the top fund for a one-year period with 56.57 per cent. Reliance Growth is the fourth-best fund, considering a three-year period. It has given 55.36 per cent over this time-frame. (The best is Magnum Global, 71.63 per cent). The same Reliance Growth, with 67.53 per cent, is the best performer over a five-year period. These figures have been released by industry tracker Value Research.

Considering just the number of funds in their category (not asset sizes), sector-specific players have practically not grown. Auto, banking, pharma, tech and FMCG are still small sub-sets - not more than a handful of sectoral funds in each category. And that is yet another pointer, one that leads us to wonder whether sectoral products will continue to remain the way they are right now. Do investors in India need more sector-oriented funds? Let our fund houses take up the matter.

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

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