Stanchart MF likely to bite equity bait

Stanchart Mutual Fund is actively considering a foray into equity markets, according to market grapevine.

Stanchart MF, which followed its global investment philosophy of sticking to debt funds when it launched its AMC in India, is being prompted to look at equities given the sluggish interest rates not only in India but also overseas.

Repo rates are now ruling at 4.75 per cent, while the equity markets have appreciated by nearly 15 per cent in the last one year.

Naval Bir Kumar, managing director of the asset management company, however, refused to be drawn into any speculation. He said that that there were no 'immediate' plans to launch equity schemes and that it was not a company policy to speculate on rumours.

The fund's decision to offer a equity scheme would be prompted by a desire to give better returns to its investors, who have been fairly loyal given its Rs 8,000-odd crore asset base.

Debt funds across the board and, many of them, have reported negative returns last year. While the scenario looks brighter now it is still not good enough. Naval admitted that the fund was seeing inflows only in short-term funds and fixed-maturity plans.

Across the mutual fund sector, whole-income funds have seen net outflows in the last four months.

The ultra-short term debt funds have given better returns (4.70 per cent) in the last one year, while normal funds "" medium term and short-term schemes "" have given returns between 1 per cent and 3 per cent.