Financial Daily from THE HINDU group of publications
Saturday, Jan 11, 2003
Financial Daily from THE HINDU group of publications Saturday, Jan 11, 2003 |
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Mutual Funds Markets - Mutual Funds `MF investors can diversify the risk element' Our Bureau
MUMBAI, Jan. 10 THE proposal to ease overseas investment rules for mutual funds would help investors in diversifying their risk and giving better return for the investors, mutual funds analysts have said. The Chairman of the Association of Mutual Funds in India, Mr A.P. Kurian, said it is a welcome decision as Indian investor would be able to participate in equities of global companies and diversify their risk. With the increase in the limit to $1 billion, mutual funds would be in a position to offer investors diversified products (both debt and equity) that would help investors to participate in the global financial market. The Chief Investment Officer of Sun F&C Mutual Fund, Mr Gul Teckchandani, said, "With this decision, India is moving towards capital account convertibility and this would help mutual funds to invest beyond ADR/GDR of Indian companies." Fund managers of various mutual funds said the condition of investment in those companies that have shareholding of at least 10 per cent in a listed Indian company means that funds can invest in companies such as Unilever that have an Indian subsidiary Hindustan Lever. They can also invest in companies like Pfizer, GlaxoSmithKline. However, in the current situation they cannot invest in companies like Microsoft and Intel as their Indian subsidiaries are not listed on the Indian stock exchanges. Asked if the appreciating rupee against dollar would encourage mutual funds to invest in overseas companies equity, Mr Alok Vajpeyi, Chief Operating Officer, said there would not have any major impact. He said in overseas debt the yield is between 1 per cent and 5 per cent while in equity the returns would be much higher and appreciating rupee would not affect mutual funds investment decisions.
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