Nishant Kumar

Mumbai: For the first time in nearly a year, Indians will not have a new equity fund to invest in on April 1, marking a pause in the flurry of launches in a booming mutual fund industry.

Since April 9, 2007, investors have had an option to buy at least one new equity fund every day, and on many occasions, more than 10 funds, data from fund tracking firm ICRA Online showed.

But, fund distribution firm Karvy and another distributor said they did not have communication from any of India’s 33 mutual fund companies about their launch plans for at least the next couple of days.

A muted response to equity funds in the wake of a sharp fall in local stocks means the flood of new funds is unlikely to return anytime soon, once the offer period of a globallyinvested stock fund from DSP Merrill Lynch ends for subscription on Monday.

“I think it is a function of the market sentiment,” Anthony Heredia, executive director at the Indian fund unit of Morgan Stanley, said.

The benchmark BSE Sensitive Index is down about a fifth this year,wiping out nearly 27% of the net asset value of domestic equity funds, dampening appetite for fund investments.

South Korea’s Mirae Asset, which launched its first Indian fund last month, mopped up less than Rs150 crore. Existing stock funds collected Rs5,000 crore last month, the lowest since September and a drop of 60% from January, data from the Association of Mutual Funds in India (Amfi) showed.

Asset management firms offered 60 new equity funds last year, the highest number in any year. So far this year, they have introduced 19 new stock funds, according to data from global fund tracker Lipper. But a weak stock market means investors will have to wait a while for the next new fund this year.

“I think people are waiting to be on slightly firmer ground before they launch new products,” Ashvin Arora, director of the OptiMix division of ING Investment Management said.

However, he said, the industry was not seeing any redemption pressure.

Source : DNA