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May 29, 2001
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Money > Business Headlines > Report May 29, 2001 |
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Mutual Funds woo firms to park idle fundsJanaki Krishnan Asset management companies are aggressively wooing corporates to invest their idle cash in short-term instruments such as liquid and money market funds. Companies can make a neat return of 10 per cent on an annualised basis by investing in short-term liquid funds. The mutual funds are pulling out all stops in order to accommodate their corporate clients, stopping just short of violating the Securities and Exchange Board of India regulations. It also helps that Sebi has no specific guidelines on how much a single investor can put in a scheme. Admitting to corporate money being mobilised, an official with SBI Mutual Fund said, "How else do you think the large sums being mobilised can be accounted for?" Apart from the funds survival, the 'feel-good' factor in the mutual fund sector has also to be maintained, he pointed out. So the April figures for the fund mobilisations are a dead give-away. The liquid and money market schemes account for more than 54 per cent of the total funds mobilised. Income (debt) schemes are at a respectable second place with 35 per cent of the mop-up. "The figures are misleading. They are not actually investments but corporates putting in their money for a maximum of one week and then pulling it out," said an industry source with respect to the gross mobilisations by liquid and money market schemes. "The net figures will show that," said the source. In April, liquid schemes raised Rs 42.80 billion but at the same time Rs 34.67 billion inflows left MFs with a net accretion of Rs 8.13 billion at the end of the month. In the face of sluggish retail interest in MF schemes, this is the only way that asset management companies can mobilise money and justify their existence. Not that retail investors are totally absent - equity schemes are still attracting a small loyal group of investors but a good portion of them this April can be accounted for by tax savers, while the remaining are going to gilts and other schemes. Powered by YOU MAY ALSO WANT TO READ:
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