India-dedicated Offshore MFs Turn Flavour Of The Season

Mumbai, Nov 2: | Updated: Nov 3 2003, 05:30am hrs
With overseas mutual funds (MF) accounting for 28 per cent of the total FII investments in the domestic markets, India-dedicated offshore funds are in the limelight. Domestic MF players claim that these India-dedicated funds are increasingly contributing to investments by foreign investors.

Among over 30 emerging market funds, India-dedicated funds have caught the attention of typically conservative institutional players from all over the world, say domestic MF heads.

Leading the pack of these emerging market funds is the HSBC India GIF Equity Fund, housed under HSBC Asset Management India Pvt Ltd, which has witnessed a jump of nearly 400 per cent in its corpus size from $90 million in November 2002 to $445 million in October 2003.

Speaking about the success of this fund, Sanjay Prakash, CEO, HSBC Asset Management India Pvt Ltd, said, we have witnessed a huge growth in the corpus of the fund on the back of the India story which is making waves abroad. Moreover, we invest in a broad kitty of stocks and give the investors the benefit of diversification through this fund. Even when performance of equities in the US and Hong Kong markets are excellent, we witness a novel trend among investors to shift to India-based funds like ours.

We at HSBC believe that with the current PE levels in Indian capital markets and several industries slated for a re-rating, we have greater opportunities for performance, he said.

Also, the India Advantage Fund (Rs 183 crore corpus) and the India Excel Offshore Fund (Rs 50 crore corpus) both housed under Birla Sun Life Asset Management Company (BSLAMC) have witnessed a rise of over 100 per cent each in their corpus, fund managers at the AMC claimed.

A BSLAMC official told FE, The India Advantage Fund has seen a growth in its corpus size on the back of healthy participation from investors based in the Middle East. We believe this fund will attract more attention of the overseas investor community as we have embarked on marketing strategies for those based in the US and Europe.

On the investment strategy for this fund he said, The India story is portrayed best by the selection of stocks in the portfolio. We have a judicioius mix of banking, automobiles and agro-chemical stocks. All these sectors have witnessed turnaround in the recent past.