Planning to launch slew of products: Lotus AMC

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Lotus Asset Management has launched the Lotus India Liquid Fund priced at Rs 10 per unit.

CEO of Lotus Asset Management Ajay Bagga says that they are planning to launch a slew of products across the entire asset allocation spectrum.

Excerpts from CNBC-TV18's exclusive interview with Ajay Bagga:

Q: How big is this fund and how would you be dividing this in regard to co-operate debt, G-secs and money market instruments?

A: We have just opened the NFO today and it is on till November 16, that is Thursday, so we would be able to let you know the size of the fund on next Monday, once we reopen it for continuous purchase and sell.

In terms of the portfolio, we are running a AAA portfolio, we have AAA rating from Crisil. So it will be 100% in AAA or B1 for the papers or a mandate and about 10-20% of the assets could be in cash and overnight assets on ongoing basis.

So the portfolio will really tend towards expectations in the market and right now, we do expect a portfolio duration of about 100 days or lower, that is what would be the portfolio creation that we are looking at.

Q: Why a liquid fund? Are you anticipating that a lot of people are sitting on cash and would be putting in liquid fund, are you anticipating a lot of cuhurn from equity to debt and are people wondering where to go, what is the justification for this one?

A: No, we are just starting a broadbase mutual fund in India and it is just one of the building blocks really. So the liquid corpus in the industry is among the highest at about nearly 47% of the total industry AUMs (Assets Under Management). So we are just starting with the liquid funds but over the next few months, we will be launching a slew of products across the entire asset allocation spectrum.

So we have filed a number of documents with a regulator and we expect to keep launching new products nearly every month over the next few months time. So the liquid is just a starting point where we are attracting money into the cash segment.

Q: What is the approximate return you think you can give over the next quarter?

A: It will be more in line with the industry. So if you see the retail corpuses in these funds, they are anything from 6.25 and 6.50 and the institutional corpuses are yielding more than 7%.

So the pricing is very fine in these funds and it is quite transparent. I would say that it would be within the top tier in the industry and that is our expectation and endeavour on this. So it will really tend towards the kind of duration that we are running very clearly and it is a AAA portfolio.