24 Funds Told To Review Plans

The Securities and Exchange Board of India has asked 24 mutual funds, which have been performing unsatisfactorily, to review their work including investment strategies.

D R Mehta, chairman of the Sebi, said: "We have asked 24 mutual funds that are not doing well to review their performance and place the report before their board and trustees."

Speaking at the release of Mutual Fund Year Book-2000, Mehta said, "The board has no intention to meddle with their working." He added, "Some of the poor performing funds have given negative returns of over 30 per cent."

Referring to the performance of the schemes of the Unit Trust of India, including US-64, he said the problem was only with the equity schemes. He added that the debt funds managed by the UTI had provided better returns. "The UTI is a powerful body and will be able to overcome the problems," Mehta said.

Mehta said most funds were following the Sebi guidelines and had submitted to discipline that inspires investors confidence. The net asset value of the equity funds were ruling low due to the fall in the markets but the debt funds have done well with returns in the range of 10-11 per cent, he added.

The asset management companies have raised funds worth Rs 6,990 crore in the first-quarter of this fiscal, while the gross collection in April-June 2001 was about Rs 28,200 crore, the Sebi chief said.

Mooting an idea for the mutual funds to support investor education, he said, the unclaimed dividend of Rs 500 crore lying with the funds could be used for this purpose.