The Hindu Business Line : Lot of new offers in pipeline

IF you had been investing in equity funds, chances are that you are now faced with that classical question: Is this a time to exit, partially or even entirely, from the market? Your poser would have been based on a few simple things - the index is hovering near 7,000 points, there is an opportunity to book profits and there is an apprehension that stocks will not reach these heights again in a hurry.

As for the apprehensions, we have little to say except that each investor has the right to determine in his mind the level at which he would like to exit. Whether that level has been reached in your case is not for anyone else to establish. However, there is a fair chance that you would have logged decent returns by now, especially if you had entered the market early.

The point is, not every one manages to get in at the early stages. For some people, it is lethargy. For others, it is indecisiveness.

From the point of securing returns, an entry into an equity fund when it was priced at Rs 10-plus may not really be the same as an entry at Rs 16. You have to take a call early on and move ahead quickly to actually execute the decision that has been taken.

Experts will tell you to stay invested for the long term, particularly till the time you are able to meet your objectives fully. However, staying committed to dud investments - in this case, equity funds that simply fail to perform even when the time period is sufficiently long - is not a good idea at all.

It is not that fresh opportunities are not coming up. For an IPO investor, there are a whole lot of new offers in the pipeline. These will include schemes mooted by Prudential ICICI, Standard Chartered and Sundaram. The new offer scenario, incidentally, has seen Sahara MF coming out with an equity fund with variable fees linked to its performance. Variable fees, it is felt, are a good thing for the investor fraternity. It remains to be seen whether the rest of the asset management industry actually takes up the cue.

Those who wish to know about the latest developments abroad may tune in to news emanating from Morningstar's next annual conference, slated for next week. There will be, inter alia, discussions on the value of independent investment organisations, behavioural finance, asset growth recorded by some of the world's largest fund houses and the impact of regulatory changes on the players.

Meanwhile, back home, there is news for UTI MF watchers in the form of UTI Opportunities Fund. The Opportunities Fund will be created by combining five relatively small schemes with similar objectives. The new fund will invest mainly in four or five sectors that are expected to outperform the broader market in the short to medium term.

Mr A.K. Sridhar, CIO of UTI MF, is known to have said that the scheme will aim at outperforming plain vanilla equity funds. Investors, needless to say, will keenly watch how well it evolves.

The Indian economy is expected to grow at 7.2 per cent for FY 06 on the back of normal monsoon. India along with South Africa will be the only two major economies which will grow at a faster pace this year than the previous year

Nilesh Shah, CIO, Prudential ICICI MF

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

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