Mutual funds line up14 debt schemes to tap markets

Jai Kumar NR

New Delhi, Dec 3: The buoyancy in the debt market is driving fund houses to come up with more debt-related schemes. Various mutual funds have lined up 14 such schemes and they have already filed the draft document with the Securities and Exchange Board of India (Sebi) for the initial offers.

The recent filings with the Sebi include Templeton Floating Rate Income and JF Cash Fund. JF MF is also launching an equity fund, along with its cash fund. Of the 20 such filings, only six schemes are equity related.

Templeton Floating Rate Income Fund, an open-ended income scheme, is a new concept. The scheme is between a short-term and long-term fixed maturity plan.

The objective of the scheme is to provide income, consistent with the prudent risk from a portfolio which consists of floating rate instruments, fixed rate debt instruments swapped for floating rate returns, fixed rate instruments and money market instruments. The scheme has an institutional plan and a retail plan. Both the options have two investment plans - dividend and growth.

BOB MF is launching three open-ended debt schemes - an income scheme, a liquid fund and a gilt fund. The MF also plans to offer an equity scheme and a balanced fund, along with the debt schemes.
With the addition of these funds, BOB MF aims to diversify its basket of schemes. MF behemoth Unit Trust of India is also in queue with a regular income plan. Two of the other offers are fixed maturity plans, one each from Sundaram MF and Sun F&C MF.

Two new MFs — First India MF and Horizon MF — are also launching debt schemes in order to make a presence in the fund industry. First India has lined up three debt schemes — an income fund, a liquid scheme and a gilt fund. The other new player, Horizon, is entering the market with an income fund and an equity scheme. IL & FS MF is also offering a gilt fund. Another gilt fund from Pioneer ITI MF is currently open for subscription.

As the activity is more concentrated on most actively traded stocks, two index funds, one from Cholamandalam MF and the other from Prudential ICICI, are also slated to hit the market.