Investors seem desperately hunting for good mutual fund schemes to park their money, what with interest rates being slashed right, left and centre, and the Unit Trust of India's US-64 scheme blowing up their long-term savings.
A three-day personal finance show 2002 which began today at the World Trade Centre is testimony to this. The young, the old, the working and the retiring folk were all seen hunting for best possible deals in mutual fund products. Investors are clearly wary against further investments in Unit Trust of India.
They however, continue to have faith in private sector mutual funds, and many are looking at equity funds. The retiring class is, however, cautious and prefers the debt option.
Said an Reserve Bank of India official, about to retire in the coming year: "I'm looking at a good investment fund whereby I can plan for myself post retirement and for my family".
This gentleman has not invested to date as his salary goes towards paying premium for an insurance cover meant for his handicapped son.
Many investors were seeking to find the real picture in the market in person, as they did not trust their local agents to inform them of the entire range of investment products available in the market place.
A young executive from a software company made it very clear that he was checking up on the various recommendations given by his broker.
Even as queues formed in the stalls of the housing finance companies, none of the prospective customers were willing to sign up for a loan on the spot. "We have just come for information, which we will go through at leisure," said an old man, keen to opt for refinancing his old loan taken at higher rates.
Housing finance companies have since December last been on a slashing spree, and brought down the rates. Slashing of rates said most visitors to the exhibition was inevitable, "as the returns we get on our fixed deposits have also been reduced drastically".
Interest was perked up at insurance companies' stalls, especially ICICI Prudential Life Insurance, when announcement of free offers on visitation of the stall was made. However, most visitors said that they were more comfortable with Life Insurance Corporation of India (LIC), as it has the stamp of the Government of India. "So far as new companies go, how can we be sure that they will be around at the time of claims. After all, a life cover is for 15 to 20 years and more, and we have seen what happened with the non-banking finance companies and their attractive offers," said one visitor.
New kids on the insurance blocks were aggressively pushing their products, even running down their competitors, especially LIC. SBI Life Insurance pushed its single premium plan, marketing it more as an tax saving instrument, rather than a protection tool. ING Vysya also pressed its anticipated whole life plan offering cover till the age of 85.
Retiring people however, preferred to go to the LIC stall, but were disappointed when the pension plans of the incumbent insurer, had been withdrawn. Said the LIC official at the stall: "Don't worry, we will be re-introducing the plan in a month".
He admitted that the rate would be slashed. Since the bank rate cut, LIC has reduced the rate on its guaranteed product offerings across the board, and more are in the pipeline.
