To take investment call post poll outcome: UTI MF

Excerpts from Bazaar on CNBC-TV18 Watch the full show » Nifty BSE | NSE 30/05/12 Are Mutual Funds betting on Nifty?

Q: There has been some criticism of the mutual fund industry these past two months - in that they have not participated as much as many other investors have in the rally that they have held unreasonably high amounts of cash - how would you respond to those points?

A: I think we should wait for maybe for few more weeks before we can pass a judgment on this, As I said there are some technical parameters on whom this rally appears to be - highly sentiment driven. If one looks at the last four rallies spread over ten years - per day gain has been in a very small range even in the best rallies. Right now it has almost doubled from that rally. So is it sustainable? Another way to look at it is that retail money is not coming to the mutual fund industry even today. So even the retail customer is waiting, he is also watching. So whatever we are seeing is because of external liquidity flowing into our market.

Q: That has been the experience with UTI as well. That you have not seen too much by way of new subscriptions from retail in this rally from 8,000 to 12,000 Sensex?

A: maybe compared to other mutual funds we have been gainers. We have done better. For example - whole of 2008-09 while in equity the rest of the industry minus UTI was negative we were up by more then Rs 1200 crore. Even now we are seeing inflows. One of our funds  for example; UTI Spread fund which use to be in the range of around Rs 180-190 crore it has almost doubled. It is around Rs 380 crore so we are seeing inflows. UTI is seeing inflows. But would say that the way we could have expected the inflows to come is not yet happening. We are seeing sales of some of the other balanced funds that is happening, that has started happening. So people are now going away from pure fixed deposit of banks to maybe balanced fund of mutual fund but pure equity money is yet to come in a big way, it is not coming.