Prudential-ICICI Mutual Fund records 2800% growth in assets-$35mil to $1.02 bil
(Monday, February 28, 2000)
Rutvij Parikh in Mumbai
Prudential ICICI Mutual Fund, a 55:45 joint venture between Prudential PLC of the UK and ICICI, has posted a 2,800 per cent or 29.18 times growth in total assets under management within 20 months of inception.
The fund, which started with an initial corpus of Rs 160 crore in June 1998, is currently managing more than Rs 4,669 crore in total assets under management. The fund also collected Rs 174 crore through its three schemes, PRUICICI Growth, PRUICICI Income and PRUICICI Liquid.
The income fund, which was managing Rs 72 crore in June 1998, has grown by more than 2,600 per cent or 72 times in terms of assets under management. The investments of the income fund are spread across debt instruments like non-convertible debentures (NCDs), bonds, government securities, commercial papers and cash and balances. This account for nearly 90 per cent of the entire investments.
The top five holdings of the fund are GE Capital Services India (accounting for 7.22 per cent of its net asset value), IDBI (8.25 per cent), Reliance Industries (6.20 per cent), 11.99 per cent government paperr maturing in 2009 (3.53 per cent) and 12.50 per cent gilt maturing in 2004 (7.84 per cent).
Ajay Srinivasan, managing director of Prudential-ICICI Mutual Fund, said: "The performance of the funds are remarkable taking into consideration that we had launched our schemes after the Pokran nuclear test. The economic sanctions further had a dampening impact as most investors abstained from the markets. However, it took nearly seven months, sizable efforts and help from our foreign partners to cross the Rs 500-crore mark."
"Thereafter we have been continuously doubling our assets within a span of four-five months. With the encouraging performance of our funds, we are confidant that we will soon be the number one fund in total assets under management (excluding offshore funds). In fact, for our technology fund, we have received more than Rs 500 crore from over 100,000 investors. Emphasis on the customer and catering to their demands have been the main driving force behind the superlative performances of the funds, he said.
Currently, the mutual fund manages eight open-ended and two close-ended funds. It has more than 250,000 investors spread over 100 cities and abroad. During the next 10-12 months, the fund will be opening offices in Madhya Pradesh, Uttar Pradesh, Gujarat and neighbouring states.
The other major open-ended funds are the Growth Fund with Rs 577-crore assets under management followed by the Balanced Fund (Rs 561 crore), Technology fund (Rs 495 crore) and Gilt Fund (Rs 377 crore).
The fund's performance can be classified within three aspects namely customer focus (effectively servicing 20 centres), consistent performance of various funds through research-backed investments and strong marketing and advertising strategy.
"The internal risk-control measure has been strictly abided through. We have the regular 10-per cent exposure cap, apart from introducing various sectoral funds. However, to show performance with investments of only 30 per cent in the technology sector (which is by far the only sector showing consistent returns quarter after quarter) is truly remarkable.
This indicates that our research-backed investments in other sectors have been reaping rich rewards as compared to normal industry averages," Srinivasan said. "Prudential PLC of the UK has also been playing a key role by implementing the same international standards in distribution, product designing and international flavour to all our funds," he said.
The fund has to its credit stocks like Himachal Futuristic, Global Tele-Systems, HCL Technology, Infosys, SSI, Sterlite, Zee Telefilms, Vikas WSP, Mastek and Satyam Computer which have shown substantial returns during the last five-six months.
According to the fund, given the strong liquidity condition in the domestic markets, low interest rates, economic turnaround and the general feel-good factor at the bourses, the markets will continue to remain good in the near future.
The e-commerce and Internet-related industry, and bio-tech arena may be the two new emerging sectors which may have the growth potential for the next two years. The fund is of the opinion that select valuation can also be founded in the pharmaceutical and the fast-moving consumer goods (FMCG) sectors where the fall in prices have made valuations attractive.
-Business Standard |
