The Hindu Business Line : `All players essentially thirst for sticky money'

MR SANDEEP Dasgupta, Business Head, Deutsche MF, is convinced that Deutsche Bank's new retail banking initiative will energise the fund house's own plans to expand its asset base.

"There has to be a spin-off", is how he puts it, adding that the MF, after a fairly long respite, is ready to introduce new funds.

Excerpts:

How do you plan to leverage DB's retail platform?

The bank, which has so far met corporate and investment banking requirements of companies, has started catering to individual customers in India. This is a positive development as far as Deutsche MF is concerned. We hope to benefit from their expanding retail network.

The banking channel has lately become even more important for asset management companies. Banks in general can play a serious role in distribution of mutual funds; in fact, a number of them are already in the thick of the distribution business. Imagine a situation where even a retail customer based in a small town can go to a bank and invest with minimum effort in funds of his choice. This will be a big facilitator for funds.

After a marked hiatus, you are again talking about new schemes...

It is true that we had remained relatively silent when it came to NFOs. Now a couple of schemes have been worked out on the equity side. These will include what has been named Flagship Equity Fund. This will be a multi-cap fund, complementing the two equity products that are already a part of our stable.

On the debt side, an interesting scheme called Money Plus Fund, with exposure to investment-grade, sub-Triple A bonds, has been readied.

Will this leave you with further room for product development?

May be not right away... we will come up with fresh proposals as and when there is a need. There is, for instance, a good case for offering an ELSS. Now that fund houses are keen to take advantage of Section 80C of the I-T Act, action on the ELSS front is intensifying even as we speak.

Several new tax-savers have been launched in recent days and a few more seem to be waiting in the sidelines.

How do you view this unending parade of NFOs?

At one level, these have given the (asset management) industry a chance to raise awareness among the investing public. We have to ensure, however, that no one connected with the industry squanders the opportunity that has arisen.

All players essentially thirst for sticky money. In the three years we have been in the Indian market, this has been our objective too.

Would you say equity assets are still small for MFs?

Yes, these are small but growing. The point is, investors were never more interested in equity funds. This is reflected in the kind of response that equity offerings have received in the last couple of years. Their performance has been generally good, as unitholders will agree. The phenomenon has actually helped in creating a decent following.

As more segments of the market are tapped and as more quality distributors get involved in the process, there should be no major concerns. While no one can say whether the trend will be reversed anytime soon, the eagerness witnessed among investors needs to be sustained in future. That will be in the interest of everybody concerned.