Tracking new trends

UTI Mutual’s latest 3-year close ended, equity-oriented fund is called UTI-India Lifestyle Fund. The fund manager says that it will invest in companies that are expected to benefit from changing Indian demographics, lifestyles and rising consumption pattern.

Simply put, the fund will be investing in sectors like retail, auto, telecom, media and so on, which are dependant on spending by upwardly mobile Indians. Since its benchmark is S & P CNX 500, the company is likely to invest in emerging companies in this space (mid-cap to small-cap) – although the fund manager says that the fund shall invest across market caps. There are already two funds available in this space – Kotak Lifestyle and Birla India GenNext – both of these have done reasonably well in the past year. Market gurus have repeatedly stressed on the Indian consumption story and how it makes India a superior equity market to China.

This fund could be a good vehicle to capture this segment. However the interest rate scenario in India is still uncertain and it is difficult to predict what will be the impact of the hardening interest rates on the wallets of middle class Indians. Already there are reports about slower offtake of home loans and weakness in the auto sector. However, the fund manger says that there are still a lot of companies that will buck this trend. The scheme is to be jointly managed by star fund manager Anoop Bhaskar — formerly with Sundaram Mutual Fund managing the best performing Sundaram Select Midcap fund — and Harsha Upadhyaya.

HSBC scheme: Move to guard your investmentTHE recently launched HSBC Portfolio Management Services’ latest product promises to protect the capital that you invest in the scheme, but at the same time seeks to give you robust returns through active stock picking. HSBC Bank will guarantee every rupee you put into the product.

The PMS firm had launched a product last year that also sought to protect a part of the initial investments. However, this product is different as it will invest 100% in equities from the first day and yet protect your capital to the last rupee. Levels of protection will also be upgraded every year, ensuring some locking of profits.

Capital guard is ideally suited for first time equity investors or those who have made a sizeable gains from some earlier investments. However, the product is a four-year product which means that for the guarantee to be applicable, the investor will need to remain invested till maturity. Withdrawing before this will attract penalties. Besides, like with any PMS product, concerns on tax front will always remain. (In mutual funds, the fund house bears the transaction costs). Lastly - take a deep breath, you need at least Rs 25 lakh to gain an entry here.