Mumbai: For years, simple, unflavoured equity and debt schemes have dominated the mutual funds scene, but the advent of more complex and sophisticated products in recent months is widening choice, industry experts said.
Armed with a Rs3.5 lakh crore corpus and a growing investor account base of 30 million, the country’s family of 32 fund houses find product baskets complete with staple offerings and is now moving to the next level of innovation, they said.
“Having launched basic family of products, mutual funds are turning to more sophisticated structures and features to expand their footprints across the country,” said S. Naganath, chief investment officer at DSP Merrill Lynch Fund Managers. Last week it launched a micro-cap fund to invest primarily in firms with a market capitalization of Rs1,500 crore or less, a segment which it called “under-owned?and under-researched.”
This, he said, would let DSP take part in the early stages of emerging success stories among entrepreneur-driven small firms that may prove to be blue-chips of the future.
New fund ideas are not being pursued to make up for any shortage in assets flow that, in fact, has seen a compounded annual growth of 34% in the last three years. But new generation products have enabled asset managers to reach newer classes of investors and deepen relationship with existing customers. “This year we will see more sophisticated products hitting the market,” said Ashvin Arora, director at OptiMix division of ING Investment Management. His firm would launch a fund to invest across asset classes. All this has raised the bar for fund distributors, a crucial link in the marketing chain.