Mutuals saw 37% rise in new schemes last year

The Rs 1 lakh crore domestic mutual fund industry has witnessed a 37 per cent growth in introduction of new schemes in 2003.

The combined number of new launches went up 218 in last calendar year compared with 159 in 2002.

According to data compiled by Value Research India Pvt Ltd, a reseach firm engaged in the study of markets, growth in number of new schemes were witnessed in almost all the sectors namely equity, debt, gilt and hybrid.

Here is a category-wise list of new schemes which were brought in: 11 schemes of diversified equity, seven of index equity; two schemes of hybrid asset allocation, two funds of hybrid debt, six of hybrid equity, six of debt medium term, 20 of debt medium term institutional, 15 of hybrid monthly income, four of short-term debt, 12 short-term institutional debt, 16 of floating rate debt, 10 of speciality debt, three of ultra short-term debt, 21 ultra short-term institutional debt, 66 fixed-maturity plan, 12 medium and long-term gilts, five of short-term gilts.

Value Research chief executive Dhirendra Kumar said the last calendar year was the year of monthly income schemes (MIPs) for the industry. 2002, he said, was the year of equity schemes.

He said domestic fund houses were busy adding MIPs, which was first introduced in Unit Trust of India in 1983, to their kitty to encash the on-going market boom as well as to overcome the falling interest rates.

Having realised the pinch of the 6 per cent bonds, common investors were looking for a conservative alternative which was found in MIPs, Kumar added.

MIPs suit well for debt market investors looking for marginally higher returns at a shade higher risk. Its portfolio is: 10-25 per cent in equity and the balance in debt.

Kumar expected that the growth in number of new schemes would dwindle in the years to come as the market has got all possible types of schemes.

"The IPO of mutual fund scheme is different from an company's IPO on one at least count. A company has got its background to market an IPO which is absent in case of mutual fund. Thereby, mutual funds' IPOs will be low key affairs in the years to come," he added.

Association of Mutual Funds in India (Amfi) chairman A P Kurian said the growth of the industry would be "dramatic" although the number of new schemes would come down.

He said: "2002 has been a great year for the industry. However, 2004 is expected to be even greater."

To corroborate his statement, he quoted statistics which showed that net inflow in the industry grew to Rs 41,000 crore in April-November 2003, compared with the previous corresponding period's Rs 16,000 crore.

According to him, not only the conservative investors would look up to fund houses, but also people with good risk appetite will come to them. A top official of a fund said Sebi has been encouraging investors to invest in mutual funds.