Reliance mutual fund may foray into retail debt segment

Reliance Mutual Fund, the nation’s largest fund house, sees a huge opportunity for business growth in the retail debt segment, according to a top official of the company.

“A huge amount of money is lying in bank deposits and we see a big opportunity in mobilising these funds in the market through retail participants,” CEO Sundeep Sikka said.

Investment in fixed-income MFs was much lower than the banks’ time deposit in India, a sharp contrast to the trend seen in US, the world’s biggest economy, he said, adding they were optimistic this tendency will change in the coming days.

Retail participation in debt schemes was increasing and in the last one year it had almost doubled, Sikka said.

The aim of income or debt funds is to provide regular and steady income to investors. Such schemes generally invest in fixed-income securities such as bonds, government securities, corporate debentures and money market instruments. Such funds are considered less risky compared to equity schemes. They are not affected because of fluctuations in equity markets.

Reliance MF is focusing on higher participation by small investors and according to Sikka “retail will be the new mantra for his fund house.”