Sebi?s flak to the mutual fund industry to do away with clutter of schemes seems to be working. Fund houses are increasingly looking at merging or closing schemes that they feel will help trim product portfolio as well as reduce operations costs.
Recently, JM Financial merged its seven schemes into three, while JP Morgan MF merged India Alpha, with JP Morgan India Treasury Fund. UTI MF merged UTI Variable with UTI Balanced Fund.
Bhanu Katoch, CEO of JM Financial MF, says, ?This move will reduce the number of schemes from our portfolio. We also believe that with few number of schemes, funds can be handled and managed more efficiently. We will also reduce our sector and thematic funds.? He said with relaxed norms by Sebi, many more schemes will be merged in the coming days.
Recently, JM Agri & Infra Fund and JM HI FI Fund were merged into JM Basic Fund. While JM Financial Services Sector Fund, JM Telecom Sector Fund and JM Large Cap Fund was merged into JM Equity Fund. JM Contra Fund, JM Mid Cap Fund and JM Small & Mid Cap Fund was merged into JM Multi Strategy Fund.
While there were flurry of new schemes launched during 2006-2008, to coincide with stock market boom, the years thereafter saw lesser new launches. According to the data given by the Valueresearch, in the year 2007 and 2008, 80 and 83 schemes were launched respectively. While the number of new schemes came down in 2009 to 46 and 24 in 2010. In 2011, five schemes have been launched.
A senior official from a leading fund house said, ?The move is very positive as there are over 300 equity diversified schemes, which leads to confusion among retail investors.? Last year, only once scheme was merged, while in 2009 seven schemes were merged.
