The Hindu Business Line : `Market will be very cautious till Budget'

Its new-found aggression is quite a departure from the low-key style that the fund seemed to have adopted during all these years. Mr Sashi Krishnan, the new CEO, is of the view that expanding a fund's asset base is an absolute necessity in this day and age, especially when investors have a wider choice and competition between MFs has turned so severe.

"It's important to change the retail-institution mix. And that can't be reworked unless a fund moves into larger markets", he said.

Excerpts:

What do you expect from the forthcoming Union Budget?

The new Finance Minister has stated his overall intention in clear terms, and the market will try to locate its imprint on the Budget. To put it simply, we expect the government's budgetary pronouncements to provide further push to reforms and investments. Application of fiscal prudence will be a big issue for our policy makers.

All said and done, the market will be very cautious till the Budget actually comes through and sentiments may start looking up only after that happens.

It seems that the debt market will remain depressed...

Well, interest rates may start moving up in India, as some sections continue to predict. That is happening in some other parts of the world as well. The reality is that many investors here are not quite pleased with the performance generated by debt funds in recent times. Certain sections of the market are already in the process of moving out of traditional bond funds and investing in, say, floating rate products.

As for Chola MF, we have been trying to advance the existing debt schemes. The liquid fund is a big attraction for many investors at this juncture. People remain unsure as to what sort of developments that may take place in the debt market.

Incidentally, our assets stand at Rs 1,250 crore, an overwhelming part of which is in debt.

How is Chola Opportunities Fund poised at the moment?

As you know, this used to be our tech fund till recently. Its contents are more diversified today. However, the market is really not taking too much interest in it, given the general indifference towards equities. This is not to say that we have stopped feeling strongly about the major sectors to which the scheme is exposed.

On the contrary, these areas continue to have great potential, which have triggered the re-launch in the first place. However, the pace of development seems to have slowed down a bit.

Which are the new schemes that you have in mind?

We are going ahead with a midcap fund as well as a product that has been named Chola Income Plus. Midcap has been defined as a market capitalisation that figures anywhere between Rs 300 crore and Rs 3,000 crore. That is admittedly a decent range, after which the large-cap companies fall in place. The two funds, I feel, will fill a gap in our existing suite of schemes and complement them.

With the passage of time, the demand for such offerings should go up. We have, in fact, tried to upgrade our sales infrastructure in view of the expected increase in business, which the new schemes will bring. We are also looking at a floating rate scheme.

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`Market will be very cautious till Budget'