Date:21/07/2005 URL: http://www.thehindubusinessline.com/2005/07/21/stories/2005072102471500.htm

Back SBI Mutual plans capital-guaranteed scheme

Nilanjan Dey

Kolkata , July 20

THE country's first capital-guaranteed fund may turn up from the SBI Mutual Fund camp, once regulations on the issue are clearer.

The fund house is said to have structured a scheme with the help of its new partner Societe Generale Asset Management (SGAM).

Capital-guaranteed products are not available in the local market at this juncture, despite certain moves on this front initiated by the Association of Mutual Funds in India, the organisation that represents asset management companies.

The latter had in the recent past constituted a committee to go into the matter. A report has been submitted to the securities regulator.

SBI MF, indicated Mr Sandip Sabharwal, Head of Equity, has sought to tap SGAM's experience in capital-guaranteed funds.

SGAM, which operates in about 20 countries, is known for the range of products (including multi-manager funds and alternative investment strategies) it offers to retail and institutional investors.

The Societe Generale group, incidentally, spawned the first French mutual fund in the 1960's.

"It is generally expected that the concept of capital guarantee will have a good number of takers in India. For one thing, it will be an altogether new idea for investors here," said Mr Sabharwal.

According to Mr Naval Bir Kumar, MD of Standard Chartered MF, and head of the AMFI committee on capital-guaranteed funds, the report has been duly placed with SEBI as mandated. The regulator will now have to take a view on the matter, he said.

Funds of this nature, it is pointed out, actually require the guarantee to be given separately by an organisation. It is not known clearly at this stage whether the regulator would insist on an independent guaranteeing outfit. There is no specialist outfit in the country to provide such a service.