The AMC is considering the option of merging its open-end equity funds, Dhanvikas and Dhansamriddhi. The two schemes have a combined corpus of Rs 90 crore with Dhanvikas alone managing assets of over Rs 70 crore.

``Early next year, we plan to merge the two open-end equity funds and re-christen the merged scheme in order to give a push to collections under the equity segment,'' said Sharma. Dhanvikas has 48 stocks in its portfolio with the top ten stocks accounting for 55 per cent of the assets. The top ten stocks are HLL, BHEL, Reckitt & Coleman, HPCL, Bajaj Auto, NIIT, Novartis, RIL, Telco and SBI.

On retail response to the gilts fund, Sharma said retail investors broadly understood about the product but had little knowledge regarding the intricacies of investments in government securities. ``A retail investor only knows that his investment in a G-Sec fund carries less or no risk than investments in a normal bond fund. Hence, only highly risk averse investors come to gilt funds though in the event of interest rate volatility, they will be hit harder,'' he pointed out.

After collections in the gilt fund, assets under management at LIC MF have risen to Rs 1850 crore. ``We now plan to promote our open-end gilt and bond funds. The corpus of the bond fund has already moved up from Rs 30 crore to Rs 70 crore since its launch in May this year. We have tied up with some private sector banks for speedy transfer of funds while talks are on for sale of LIC MF products,'' disclosed Sharma. The bond fund recently paid a dividend of 4 per cent.

Regarding the closed-end debt funds under the Dhanvarsha series, Sharma said that the AMC had not shelved the assured return series. ``We are currently focussing on our open-end debt funds and once they become self-sustaining, we will launch Dhanvarsha since there is a big market for such products.''On the question of the launch of a sectoral fund, Sharma stated that time was not ripe for a sector-specific fund. ``We can give investors the benefit of investing in good sectors without being bounded by a particular sector.''The mutual fund soon plans to approach the Securities and Exchange Board of India to convert its closed-end tax planner, Dhan Tax-Saver '97 into an open-end fund. The fund has given a one-year return of 63 per cent with its NAV at Rs 14.32. The fund has a corpus of close to Rs 3 crore.

Sharma is of the opinion that FIIs will enter the Indian market in a big way early next year. ``Signs of economic recovery are there. If the entry of FIIs is combined with a sustained economic recovery, the markets will move up sharply. The present government has done a commendable task in establishing a cordial relationship with the US and I am of the opinion that US business does get influenced by its political leaders. On the other hand, the worrying factor is the management of the fiscal deficit.''

The CEO of LIC MF believes that marketing and service is the key to growth of mutual funds now though there is still lack of good infrastructure for the fund industry besides poor registrar service. ``There is not a significant difference in returns generated by funds. It is here that service standards will play a crucial role. We have decided to increase the number of chief agents from 20 to 35 and also plan to open two area offices in Ahmedabad and Pune. This will take the number of area offices to nine. We are also in talks with the Stock Holding Corporation of India to sell our funds from their 65 offices throughout the country.''