Raman said the liquid fund was needed to meet the short-term investment needs of high net-worth individuals and corporate clients, while the balanced fund would give fixed income investors an alternative investment vehicle for improving their returns without having to compromise on the safety of their capital.

He added that the Sundaram Bond Saver had built up a stable investor base and their returns would get diluted if short-term money kept flowing in and out of the fund. The liquid fund would take care of the short term surpluses of high net-worth investors.

MS Sreedhar, vice-president (marketing) of Sundaram MF said it had now been decided to spread out to other regions after consolidating its presence in the south, where its marketing activities were largely concentrated in the last couple of years. The mobilisation figures, he added, showed that unit sales in the eastern region had grown from Rs 7-8 crore per month to about Rs 60 crore monthly in the last one year.

The fixed income scheme, Sundaram Bond Saver has given an yield of 13.4 per cent since it went open-ended on January 1,1998. However, since April 1,1999 to November 24, 1999 it has reported an yield of 14.3 per cent which is the highest among all open ended income funds.

According to Raman, the income fund continues to trade actively in gilts and its weightage in the bond portfolio varies between 21-30 per cent. The average maturity profile of the fund has changed to 3.1 years from below 2 years prior to the Lok Sabah elections. "In a falling interest scenario, it is better to be in the long end of the market," he added.