The Hindu Business Line : Fund houses come out with variety of themes

Contrary to what some quarters have been suggesting so loudly, variety may well be the spice of life for investors, especially those who chase NFOs, in the days to come.

Consider the funds that are expected to be launched over the next few months and the many offer documents that have been sent to SEBI for approval, and you will realise that a genuine feast awaits the investor fraternity. With new fund houses entering the Indian market, a whole world of fresh offers will open up for the local investor. Or so one feels, given the background of some of the very prominent players that are now taking a call on India. Added to this will be a crop of gold funds mooted by home-grown players, the first of which will hit the market very soon.

That of course is something the future holds for us. For the time being, however, there is no point in just ignoring what is being offered to us by the asset management industry.

In fact, there are lots of reasons why we should take into account some of the products that funds are baiting us with right now. A few of these combine strategies that we, in this day and age, should anyway become familiar with. And not surprisingly, a number of them are close-end in nature.

For those who insist on specifics, here are a few instances, taken in no particular order.

Check out ABN Amro MF's multi-manager fund - the latest in a series - which holds on to dynamic asset allocation principles. What makes this close-end Fund of Funds (FoF) interesting is a profit lock-in proposition. The latter will aim at locking in gains beyond a threshold, a feature that becomes relevant when the market turns uncertain after a bout of strong gains. The FoF's portfolio will combine equity funds and shorter term liquid and floater funds.

You may further mull over Taurus MF's thematic product, an open-end fund that will invest in infrastructure and associated areas, including providers of capital goods, inputs and support services to infrastructure outfits. Incidentally, one may well argue that there is perhaps nothing too extra-special about this one. Several infrastructure-oriented equity funds have been introduced in the past.

Also consider HSBC MF's effort doing a close-end fund, which will try to pick up stocks of companies facing certain special situations. These may be temporarily undervalued picks or ones that hope to gain from the unlocking of value from the conclusion of such conditions. The idea, as HSBC MF points out, is to boost returns over a longer time-frame even at the cost of moderately higher risk.

These are just three examples. Even as we write this, a number of offer documents await SEBI's approval. Take a quick look at the regulator's Web site and you will know about the 20-odd proposals that have been worked out. These include Reliance Equity Advantage, Sundaram BNP Global Advantage FoF, Lotus India Growth Fund and HDFC Pearls of India Fund.

It does not really matter how these NFOs (that is, if and when they are actually launched) will fare in terms of collections.

What is of significance is that these will add to the range of products on the table.

At the end of the day, the investor who seeks variety will find his reward.

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