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Fund houses make global push, file offer documents

Jan 08 2013, 08:51 IST
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Mutual funds see offering as complementary to product bouquet. (Reuters) Mutual funds see offering as complementary to product bouquet. (Reuters)
Summary* Mutual funds see offering as complementary to product bouquet

Fund houses are making a big push towards international markets with as many as four already filing offer documents with the market regulator Sebi.

HSBC Mutual Fund on Monday filed the offer document for its Russia Equity fund and Reliance Capital Asset Management filed the document for its first overseas fund — Reliance US equity Fund on Friday. On January 3, Axis Mutual Fund and Franklin Templeton filed documents for their Axis Asian Asset Income Fund and FT India Feeder-Asia-LatAm Fund.

Except for Reliance US Equity Fund, which is a diversified equity scheme, all other schemes are fund-of-funds — which means they would invest in existing mutual fund schemes globally rather than investing directly in stocks or bonds as they do in India.

The Reliance US Equity Opportunities scheme will invest primarily in equity and equity-related securities of companies listed on US stock exchanges.

The existing international funds have lagged in performance in 2012. While the average return generated by international equity funds stood at 14.4 per cent over the last year, multi-cap domestic equity funds have delivered an average return of by 33 per cent and large-cap funds 26.3 per cent.

Fund houses launching international funds say it is a complement to their product bouquet. “It is more to do with completing the product bouquet. Different markets perform differently and therefore there is a need to have all products on offer,” said a top official with a mutual fund house.

As of now global fund houses lead when it comes to offering overseas funds. DSP Blackrock has five schemes, Franklin Templeton has four, and JP Morgan and ING have three each. Birla Sunlife too has four such schemes.

The Assets under management of such fund-of-funds,however, has seen a decline. It stood at Rs 2,394 crore as of September 2012 as compared to Rs 2,552 crore in September 2011.

GLOBAL FORAY

* HSBC, Reliance Capital Asset Management, Axis and Franklin Templeton have filed offer documents with Sebi

* Except for Reliance US Equity Fund, all others are fund-of-funds

* Average returns of existing international funds stood at 14.4% over the last year

* As of now global fund houses lead when it comes to offering overseas funds

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