MFs now focus on hinterland

After launching contra funds, fund houses seem to be hatching new ideas to cash in on the broad-based bull run in the domestic equity markets.

With practically no sector being untouched by the rally, now mutual funds are devising schemes dedicated to "rural industries".

A month after Sundaram Mutual Fund came up with the idea, Deutsche Asset Management (DeAM) has come out with their own version of the rural India fund, this time called Green India Fund.

"Deutsche Green India Fund (DGIF) is a thematic fund that will focus on the agriculture and rural theme and not on any specific sectors. We will invest in all those companies that benefits agriculture and rural India." said Sandeep Dasgupta, head - DeAM India.

The scheme launched by Sundaram is reported to have grossed above Rs 1,000 crore.

Though DGIF is yet to get the regulator's approval, the MF has already zoomed in on companies operating in agricultural and related industries.

The companies in focus include those that put up power networks, roads, canals, bridges in the rural areas as well as exotic ones such as those engaged in water conservation, floriculture, horticulture, food processing, agri-marketing, agrochemicals, fertilisers, pesticides, seed companies and logistics.

The funds will keep away from companies not directly related to the rural market. For example, Sundaram MF's scheme will not invest in sectors which are considered traditionally safe such as technology, chemicals, refineries, oil and gas, steel etc. The investment in these sectors have more or less been saturated because of the increasing liquidity.

Points out N Prasad, chief investment officer, Sundaram Mutual, "Unless the companies directly contribute to the growth of rural India, they will not be part of our fund."

The Deutsche scheme has also been designed as an open-ended equity scheme, without any exit load and will be benchmarked against S&P CNX 500 and managed by Vinay Kulkarni.