Mumbai: In its drive to give better returns to investors, SBI Mutual Fund will soon be merging two of its schemes after it has received the market regulator Sebi approval, a top company official has said.
This has come on the heels of Sebi chairman UK Sinha’s statement last week that it would allow merger of schemes to avoid overlapping and ensuring better returns to investors.
“We have received one merger approval for two schemes from the market regulator recently, for which, we have applied for quite some time,” SBI MF managing director Deepak Chatterjee told PTI here.
UK Sinha , chairman, Sebi
Concerned over non-performance of some schemes over a long period of time, Sebi chairman UK Sinha had last week said fund houses need to look into the matter and consider the merger of some schemes.
“Management (of mutual funds) should look into the areas of non-performance,” Sinha had said, adding he was in favour of merger of schemes on case to case basis. Chatterjee also said usually a merger of schemes will be beneficial to investors.
“When a merger is done, it is usually between a non-performing fund with a performing one, which is beneficial to investors. Also, if an investor doesn’t want to be part of the merged scheme, he or she can do so without paying any exit load to the fund house,” he said adding that AMC (asset management company) does all kind of due diligence before applying for approval.
Chatterjee also said the fund house is not mulling to come up with any new fund offer in the equity space in the current financial year.
“Where is the need for coming up with equity schemes? I think, we will not come up with any schemes in the equity space in the current financial year,” he said. He, however, said that the fund house would come up with debt schemes, especially fixed maturity plans (FMPs) this fiscal.
SBI Mutual Fund, which is one of the largest fund houses, has an asset under management of more than Rs 42,000 crore by March 2012.
