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India's mutual fund sector launched 75 new fund offers (NFOs) in the equity segment during the calendar year 2014. This is a historical high in a year that saw key stock indices gain nearly 30%.
The asset garnered through new launches is also at a 6-year high since the Lehman crisis.
The asset garnered through new launches is also at a 6-year high since the Lehman crisis.
Interestingly, close-ended schemes - the latest flavour of the season - dominated the new launches. Out of the 75 new offers, 51 were close-ended products with a lock in period of 3-5 years. They collectively mobilised assets worth Rs 9,600 crore - a significant amount given the poor past record since 2009.
Fund houses like Sundaram MF, ICICI Pru AMC, Birla Sun Life AMC, Reliance MF and UTI MF among others were the key players to offer such products to investors.
In December alone, 13 close-ended equity products were launched, which gathered Rs 2,222 crore of investors' money.
| Resurgence of equity NFOs | ||
| Number of equity NFOs and amount garnered in past few years | ||
| Year | No. of NFOs | Fund Raised (Rs Crore) |
| 2009 | 17 | 4411 |
| 2010 | 23 | 4659 |
| 2011 | 11 | 645 |
| 2012 | 8 | 503 |
| 2013 | 18 | 2381 |
| 2014 | 75 | 12219 |
| Source : Association of Mutual Funds in India (Amfi) | ||
Higher commission structure - as high as 6-7% - was the key driver behind the success of close-ended schemes.
Going forward, experts believe that there could be more such launches as fund houses have had a satisfactory experience with these products.
As on date there are a little over 400 equity schemes (including ELSS) in the sector managing an asset size of Rs 3.2 lakh crore.
