Reliance Mutual Fund: Mammoth Player
Reliance Mutual has a history of letting its funds get bloated in terms of its assets under management, or AUM. And the firm’s culture places a premium on running a big fund.
Ever since it started in 1995, it has rapidly increased its AUM. From being India’s largest private sector mutual fund in 2006, it became the largest mutual fund by 2007. Reliance Equity Advantage fund created history by mopping up Rs2,700 crore in its new fund offer, or NFO, in 2007. This year, Reliance Natural Resources Retail mopped up Rs5,660 crore. Reliance has managed to garner a huge amount of assets because it actively pursues NFOs. It started with the launch of two equity funds, Reliance Vision and Reliance Growth, whose performance in 2002 and 2003 made it a hit with investors.
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The asset management company (AMC) has many firsts to its credit among sector funds: banking, media and entertainment, and power. This year, it came out with a Natural Resource Fund. On the debt side, the fund house has good, low expense ratio funds such as Reliance Short Term and Reliance Liquid Treasury.
Though the fund house barely has a presence in the hybrid category, it does have a huge choice in the types of funds, with some good performers.
HDFC Mutual Fund: Star Performer
One of the industry’s sturdiest shops, its performance has been strong over time. Lately, however, it has gravitated towards the back of the pack.
HDFC Mutual’s temperate ways have served it well over the years. It has been a consistent performer, providing a cushion as racier options fell. But investors are disappointed with its performance in the second half of the bull run. Certainly the risk-adjusted returns were not impressive, but it is no cause for alarm. These funds lag the pack when the market’s raciest names lead the charge.
In Prashant Jain, investors have a fund manager who has proved his mettle over various market cycles. In 2003, HDFC Mutual Fund bought out Zurich Mutual Fund to become the second largest fund house in India, inheriting a great equity portfolio, an aspect missing earlier (prior to this, HDFC Mutual Fund was focused on debt offerings.)
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The funds’ performances have an enviable track record. The company currently has nine funds with a four-five-star rating. But there seem to be no star fund managers other than Jain. Recently, the fund house has also been losing talent. It seems to have gone on an asset-building spree—surprising, since it always steered clear of the NFO mania. In 2007, it launched a number of funds, including two close-ended equity funds, a mid-cap offering and an infrastructure fund.
ICICI Prudential Mutual Fund:Impressive Growth
It’s like having two AMCs under one roof: a large, well-run fixed income one and an average equity one.