PNB MF goes in for recast to shed low-profile image

Jai Kumar NR

New Delhi, Aug 10: PNB Mutual Fund (PNB MF), with a total assets of Rs 200 crore under its management, is on a restructuring drive. As part of its move to revamp the fund and shed its low-profile image, the MF is weighing various options including roping in a joint venture (JV) partner.

Speaking to The Financial Express, PNBMF managing director Ranjan Dhawan said the fund has shortlisted few MFs, both Indian and foreign. However, he was quick to add that roping in a JV partner is one of the options to streamline PNBMF’s operations and build its image. “The JV partner should be able to bring in both the skills of portfolio management and marketing,” he added. He, however, refused to divulge any further details of the JV.

The fund has already cleaned up its equity portfolio by exiting from sticky investments, Mr Dhawan claimed. The MF currently has 50 per cent exposure to equity and 50 per cent to debt.

“Our portfolio has stocks like Reliance Industries, Hindustan Liver, Infosys Technologies, Nestle, Glaxo, etc. We were never overweight on any particular sector and our technology exposure today is low as it may be even less than Rs 14 crore,” he said.

Its closed-end income scheme — Rips ’90 — is due for redemption on August 31. However, the fund has been giving earlier exit opportunities for investors in this scheme and is currently repurchasing the units at par while its current NAV is Rs 7.9. The assured return scheme has been giving a dividend of 12.5 per cent per annum, he said.

Mr Dhawan expressed his concerns about the deteriorating economic growth and its impact on the stock as well as debt markets. “The outlook for equity and debt markets is not very bright. The direction of equity market is not clear. In the next couple of months, the tax-paying investors should look for safer investment options like 8.5 per cent RBI Relief Bond which gives a pre-tax return of close to 12 per cent,” he said.

Although there has been heavy inflows into debt schemes, the returns in these funds may not be sustainable, he agreed. “At the moment, there is hardly any scope for a further fall in the yield. Since long-dated government papers are relatively volatile, people should get into short-term debt funds,” he opined.

There will also be lot of debt portfolio churning by fund managers in order to reduce the maturity. The MF has already brought down its average portfolio maturity to less than three years.

“Various fund managers have different perceptions about the markets. We are very conservative and hence, reduced our average debt portfolio maturity from a high of 12 years. Almost 50 per cent of our debt corpus is kept in liquid short-dated fixed deposits,” he disclosed.