The desire among India’s well-heeled investors to look beyond local equity markets has domestic mutual funds rushing to offer products that reflect returns of overseas assets. In this financial year so far, asset management companies have launched five such schemes that route funds to overseas funds investing in Chinese shares to global real estate to commodities, as Indian investors seek to capitalise on assets that are not available in domestic markets.
Though the response to these schemes has been largely cold so far, domestic mutual funds — mostly with foreign parentage — plan to introduce more such schemes locally in the hope that the exclusivity of these products will lure Indian investors to test their fortune in them. A majority of investments of Indian investors in mutual fund schemes are in domestic equities and debt instruments.
“We want to launch a few other products that are not available in India and especially in the ones where our expertise has been proven globally,” said Ashu Suyash, MD and country head — India, Fidelity Investments, which recently launched its global real assets fund, which invests in a Luxembourg-incorporated global real asset securities fund that in turn puts money into global energy, materials and real estate assets among others.
Other such schemes, popularly known as feeder funds, launched this year include DSP BlackRock’s World Energy Fund, World Mining Fund, JP Morgan’s Greater China Fund and Mirae Asset’s China and Global Commodities funds. Benchmark Asset Management also recently launched India’s first international exchange traded fund that captures returns from Hang Seng. HSBC Mutual Fund has sought Sebi’s nod to introduce a scheme that invests in a Brazilian fund.
Industry officials said a large chunk of the investments in these funds is from relatively wealthy investors, mostly from metros.
“The fresh idea that these schemes bring is what attracts investors to them, as India is increasingly being linked to global market. Mutual funds are looking to capitalise on this curiosity factor,” said a top official with a private mutual fund.
According to Morningstar, assets of fund-of-funds that invest overseas stood at Rs 1,395 crore as on February 28, as against Rs 1,170 crore September-end. Mutual fund industry had assets worth about Rs 7.8 lakh crore as on February 28.
Wealth managers feel increased access to various commentaries about the outlook of asset classes has lured investors here to such funds.
“For Indian investors, it is the performance that matters rather than diverse asset allocation. That’s the reason why feeder funds that mirror commodity (including gold) and emerging market assets have been relatively popular,” said Ashish Kehair, head-products & strategy, global private clients, ICICI Securities.
Mr Kehair, however, added that the interest among investors is still far from satisfactory. This is because such schemes are yet to receive the status of an equity fund for favourable taxation purposes and there is lack of awareness about the prospects of these products.
Source: http://economictimes.indiatimes.com/markets/stocks/market-news/MFs-line-up-best-global-assets-for-investors/articleshow/5665048.cms
Though the response to these schemes has been largely cold so far, domestic mutual funds — mostly with foreign parentage — plan to introduce more such schemes locally in the hope that the exclusivity of these products will lure Indian investors to test their fortune in them. A majority of investments of Indian investors in mutual fund schemes are in domestic equities and debt instruments.
“We want to launch a few other products that are not available in India and especially in the ones where our expertise has been proven globally,” said Ashu Suyash, MD and country head — India, Fidelity Investments, which recently launched its global real assets fund, which invests in a Luxembourg-incorporated global real asset securities fund that in turn puts money into global energy, materials and real estate assets among others.
Other such schemes, popularly known as feeder funds, launched this year include DSP BlackRock’s World Energy Fund, World Mining Fund, JP Morgan’s Greater China Fund and Mirae Asset’s China and Global Commodities funds. Benchmark Asset Management also recently launched India’s first international exchange traded fund that captures returns from Hang Seng. HSBC Mutual Fund has sought Sebi’s nod to introduce a scheme that invests in a Brazilian fund.
Industry officials said a large chunk of the investments in these funds is from relatively wealthy investors, mostly from metros.
“The fresh idea that these schemes bring is what attracts investors to them, as India is increasingly being linked to global market. Mutual funds are looking to capitalise on this curiosity factor,” said a top official with a private mutual fund.
According to Morningstar, assets of fund-of-funds that invest overseas stood at Rs 1,395 crore as on February 28, as against Rs 1,170 crore September-end. Mutual fund industry had assets worth about Rs 7.8 lakh crore as on February 28.
Wealth managers feel increased access to various commentaries about the outlook of asset classes has lured investors here to such funds.
“For Indian investors, it is the performance that matters rather than diverse asset allocation. That’s the reason why feeder funds that mirror commodity (including gold) and emerging market assets have been relatively popular,” said Ashish Kehair, head-products & strategy, global private clients, ICICI Securities.
Mr Kehair, however, added that the interest among investors is still far from satisfactory. This is because such schemes are yet to receive the status of an equity fund for favourable taxation purposes and there is lack of awareness about the prospects of these products.
Source: http://economictimes.indiatimes.com/markets/stocks/market-news/MFs-line-up-best-global-assets-for-investors/articleshow/5665048.cms
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