MF Weekly Wrap: Fund houses race to complete set of 34, market abound with NFO

In the week gone by, four fund houses filed draft offer documents with market regulator Securities and Exchange Board of India (SEBI), seeking its approval to launch various schemes.

Fund houses like IDFC Mutual Fund, Sundaram Mutual Fund, ITI Mutual Fund and Essel Mutual Fund filed offer documents for new fund offers (NFOs). Equity, liquid, debt and arbitrage were the themes for which the mutual fund houses filed applications.

IDFC Mutual Fund filed a draft offer document for its IDFC Small Cap Fund and IDFC Ultra Short Term Fund, while ITI filed one for a liquid scheme and Essel Mutual Fund filed one for an arbitrage fund.

Experts said that after SEBI’s guidelines on re-categorisation of mutual fund schemes, the fund houses that did not have products in a particular category are launching schemes just to have a complete set of products.

In October, SEBI had defined 10 broad categories for equity funds, 16 for debt funds, 6 for hybrid funds and 2 for special situation funds.

While hybrid funds combine equity and debt, special situations funds offer goal-based solutions for retirement planning and for creating a fund for one’s children.

Each asset management company can only have one scheme under each of these 34 categories. However, there is a fifth category called ‘others’, which will consist of all other funds like index funds, exchange-traded funds, gold funds, and fund of funds.

“Number of schemes are expected to go up due to new launches. A few fund houses are launching new schemes to complete their product basket,” said a chief executive officer of a private fund house who wished to remain anonymous.

This week, Moneycontrol got an interview with Essel Mutual Fund’s chief investment officer Viral Berawala, who expects the equity market to remain volatile this fiscal year. In terms of sectors, Berawala said the fund house is betting on fast moving consumer goods, insurance and private sector banks focused on retail.


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