Funds in dilemma on product names

Mutual fund houses are divided about naming their new product offerings, as they have been following a mix of strategies with regard to their past schemes.

The public sector fund house, SBI Mutual Fund has launched schemes such as the Infrastructure Fund (launched this year) and the One India scheme (launched last year), bearing its name.

The fund's older schemes are marketed under the name 'Magnum'. The fund house has not come out with a single equity or debt scheme under the brand name 'Magnum' since 2006.

"In 2005-06, we conducted a survey and found that people did not know that the Magnum schemes came under the aegis of SBI Mutual Fund. Magnum was used way back in the 1990s and so we decided to use the name of the fund house in the scheme's name," said Srinivas Jain, chief marketing officer, SBI Mutual fund.

Public sector fund houses such as the UTI Mutual Fund and SBI Mutual Fund have been in business for some time now, with UTI's Mastershare being the oldest mutual fund scheme around.

Fund houses are retaining their old brands, but are gradually moving away from using their names in their product offerings.

In its most recent product offering, Baroda Global, launched in March 2006, the Bank of Baroda Mutual Fund has not used the BoB name.

However, fund houses including DBS Cholamandalam MF and ICICI Prudential MF are sticking to one brand name for all their schemes. DBS Cholamandalam could take a call in the future on naming its schemes differently, according to industry sources.

Private sector fund houses such as Birla Sun Life Mutual Fund and Franklin Templeton have followed strategies dictated by their ownership patterns. For instance, the AV Birla group had a joint venture with Capital group International of the US, till 1999.

"The Birla Sun Life brand name came into being after we entered into a joint venture with Sunlife. We haven't changed the names of the earlier schemes only because it is a complex process. But we are definitely extending the branding of Birla Sunlife in all our forthcoming products, including our new fund offering," said Raghavendra Nath, VP, Marketing and Strategy, Birla Sunlife Mutual fund.

However, funds maintain that they mainly position their funds based on market capitalization and investment styles.

"The name of a fund depends on the investment style and asset class. On the equity side, we have two labels, Franklin (Mix of growth & value styles) and Templeton (pure value). Our hybrid funds have the FT label, whereas fixed income funds have the Templeton moniker," said Sivasubramanian KN, senior portfolio manager - equity, Franklin Templeton.

While this is good marketing strategy, distributors maintain that it is difficult for the retail investors to clearly identify the schemes they want to invest in, due to the clutter of equity-diversified schemes.

"In the current market scenario, fund houses need to rationalise the names of the schemes so as to reflect the investment mandate," said Sameer Kamdar, Country head-mutual funds, Mata Securities.