Mutual funds performance analysis and scheme evolution; HB Portfolio Leasing Ltd.

Abstract

With the entry of private sector mutual funds, a large number of Indian and international players are being attracted to this “sunrise area’. Thus the eight public sector monoliths are now striving hard to keep up with the competition . Nevertheless, there seems to be a certain loss of public confidence which is being reflected in the prices at which the MFs are being quoted. The growth schemes of the public sector MF have given good returns even by international standards and many have also beaten the index in terms of performance. The discounts (of market prices to the Net Asset Values, NAV) can be attributed to the stock market imperfections and the inadequate transparency and liquidity faced by the investors. Although the initial performance of even the private sector MF has not been as good as expected, it is still too early to judge their performance. As more and more companies are joining the bandwagon, some of these would be forced to pull out if they do not function well. It is for this very reason that investor servicing is one area which could well decide the fates of more than one MF. Considering H.B. Portfolio Leasing's various strengths and weaknesses, its first scheme must be small in size with focus on performance rather than aggressiveness. HBMF will have to build its credibility overtime but it is of utmost importance that for launching a MF all the support facilities have been well provided for.