The Hindu Business Line : India-specific funds cash in on growing investor confidence

Funds of all shapes, ranging from such large ones managed by HSBC and Fidelity to the not-so-large ones offered by Deutsche, have reported a marked growth in assets.

The run-up in the index to 9,500 points has helped these funds emerge as even heavier entities, say people in India who closely track the trend, adding that part of the monies being poured in by clients are making their way into stocks that are not always part of the large-cap list.

In many cases, funds managed locally imitate those offered overseas in terms of allocations.

Fidelity's India product, which now stands well over $2 billion, has a follower in Fidelity Equity Fund. The latter, launched about seven months ago, is known to have invested in a large number of stocks, cutting across sectors and market capitalisations.

"The India fund has pulled in money from new investors," said Ms Ashu Suyash, Business Head for Fidelity in India, adding that Fidelity Equity has also grown in size, driven as it is by a diversified portfolio that has adopted a `go anywhere' approach towards stock selection.

Similar sentiments are being echoed by Mr Sanjay Prakash, CEO of HSBC MF, with reference to the jumbo-sized fund managed by HSBC.

"To put it simply, the situation reflects the level of investor confidence," he said, adding that the broad market in India has gone up substantially in recent years, a fact reflected in the near tripling of the Sensex over the past three years or so.

The BSE index, in fact, now stands out amidst the top few benchmarks in Asia.

In India, HSBC MF (a relative newcomer to the country's asset management space) is set to increase the number of equity products it offers through the launch of India Advantage Fund.

According to Mr Sandeep Dasgupta, CEO of Deutsche MF, the India-specific fund managed by Deutsche has grown into $260 million. While this is a small quantum by certain standards, the fund has gained from sustained interest displayed by investors in the Indian market.

Like many other funds, the Deutsche product too is focused on the relevant MSCI index. Its relative large-cap orientation has helped it at a time when positive sentiments have particularly benefited a number of large-cap stocks, Mr Dasgupta said.

It may be mentioned here that in the Deutsche case too, the fund was started only last year; it now sells through retail security companies as well.