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May 06, 2013, 04.25 PM IST | Source: CNBC-TV18

New categories of MF investments: How to gain from it

In an interview to CNBC-TV18, Feroze Azeez of Anand Rathi Private Wealth Management discussed about the new categories of mutual fund (MF) investments and how retail investors can benefit from it.

Feroze Azeez

Director- Investment Product, AnandRathi

Expertise : Mutual Funds

More about the Expert...

In an interview to CNBC-TV18, Feroze Azeez of Anand Rathi Private Wealth Management discussed about the new categories of mutual fund (MF) investments and how retail investors can benefit from it.

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Below is a verbatim transcript of the interview:

Q: Can you take us through the new categories of mutual fund (MF) investments that have come up and what is the scope of gains for retail investors from these new categories of MFs?

A: There are about 4-5 new categories, which are emerging over the last couple of months. One of them is the global feeder funds. It is not a very new category but it is now gaining flavour and should be a part of all asset allocation, which a person does be it retail, high networth (HNI) or a corporate from an asset allocation perspective. These are the global feeder funds.

Basically, they collect the money from a domestic market from any sources, convert them into dollar and then invest in a already existing global fund, which is a large fund managed by very experienced fund managers. That is what it does.

The advantages are numerous for a retail investor especially. In this kind of an economic situation where equities have not performed, it is a very good answer, at least it answers a portion of it.

The advantage is the diversification. Retail investor can invest Rs 2,000 and have his money - USD 38-40, which get bought - invested in 100 different stocks in two-three different nations, which is like diversification personified to my mind.

Indian equities are always not going to be on the top. If you look at the last one year, we are ranked 28th. When you look at the rest of the indices, even a developed market like Japan can sometimes surprise us. So having an exposure for a retail investor when it is so affordable makes sense.

Q: Can you name some of the funds?

A: Yes. I would like a retail investor, who is starting up, to start with a developed country's fund especially the US based fund, which is the largest stock exchange in the world. Franklin US Opportunities Fund has been there for about six years. There is a feeder fund called the Franklin Templeton Feeder Fund into the US Opportunities Fund that is a good one and ICICI US Opportunities Fund. These should be the good start points for a retail investor.

Q The first non-UTI mutual fund was started by:
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