HDFC MF bucks trend; mops up Rs 6 billion

NetScribes/Janaki Krishnan

HDFC Mutual Fund's ability to mop up nearly Rs 6 billion at a time when mutual funds are finding it increasingly difficult to retain funds, says much for the financial institution's brand equity.

In the month of July, net assets of mutual funds have actually declined 3.5 per cent to Rs 997.19 billion, highlighting the redemption pressures faced by the mutual fund sector.

Giving the break-up, Milind Barve, managing director, HDFC Asset Management Company, said that the income scheme had mopped up Rs 3.60 billion, the growth fund Rs 1.35 billion and the balanced fund Rs 900 million.

He attributed the good response to the institution's huge retail customer base, its strong distribution network and its marketing and sales force.

HDFC Mutual Fund's ability to attract this kind of money -- at a time when investors are disillusioned with the performance of mutual funds and are choosing to pull out their money from equity and debt funds -- is a testimony to the strong trust reposed in the institution by investors. It also is spill-over from HDFC's efficient handling of its other business activities.

The scheme-wise break-up of the funds mobilised -- more than half of it is accounted for by the income fund -- is also indicative of the investor preference for 'fixed income' instruments.

Despite the current uncertainty in the government securities and corporate debt market, investors continue to believe that debt instruments are more reliable than equity; equity funds have seen a drastic fall in their net asset values since April 2000.

With respect to HDFC Mutual Fund's equity fund, Barve said that they would take care to ensure that the portfolio was as widely distributed as possible and not concentrated in a few scrips or sectors; which is the industry trend currently.

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