ITC Threadneedle Mutual Fund, which already has two focused funds and a corpus close to Rs 92 crore under management, also proposes to uneil a series of new schemes in the next 18 months.

As the risks in the high-risk equity fund would be well-defined, industry sources believe, the risk control measures would be taken care of while designing the scheme. ITC Threadneedle is perhaps the only mutual fund which has well-defined products and, hence, its assets under different schemes are easily distinguishable.

Industry sources although there is an appetite for such high risk funds in the market, it isdifficult to foresee how well such a product would be received by investors because the concept is relatively new to the Indian markets.

The Special Situations Fund ideally would begin with a small corpus and as the concept sinks in among investors it could grow in size, said Holdsworth. The fund would take advantage of fundamental research into companies which are likely to gain from special price appreciation opportunities arising from either mergers/acquisitions or a turnaround in performance or a major policy change affecting an individual company. The fund would go for short term gains with a holding period of three to six months. Opportunities would arise both in rallies and reactions on bourses, Holdsworth said. For example, a turnaround candidate spotted early would be picked up before the scrips bottoms out in the market, he added.

Giving an idea of the kind of leveraging on portfolio that was possible in such a high-risk equity fund, Holdsworth said the fund manager could in a given situationinvest up to 15 per cent of the scheme's assets in a particular stock if he perceived it as a winner.

ITC Threadneedle also intends to launch a liquid fund, a balanced fund and a tax-saving scheme besides a few sector-specific funds. Holdsworth said when the sector-specific funds are launched, investors will get a wide choice of three or four simultaneous launches instead of limited options if only one software fund is launched.

Holdsworth said he also wanted to lend stability to its existing schemes - the Top 200 Fund and the High Interest Fund - by getting more institutional investors. The High Interest Fund's corpus of about Rs 47 has investments of Rs 12 crore from institutional investors while the rest is from retail investors, he added.