Birla Sun Life seeks Sebi nod to merge MF schemes

Birla Sun Life Asset Management Company, investment manager of Birla Sun Life Mutual Fund, has sought approval from the Securities and Exchange Board of India (Sebi) to merge some of its MF schemes.

“We have identified some of our existing schemes for consolidation on the basis of their underlying investment philosophy and objective match,” said A Balasubramanian, chief executive of Birla Sun Life AMC, in an emailed response. “Any consolidation has to have the necessary permission from Sebi, for which we have applied.”

He did not offer details of the schemes identified for merger. Currently, the fund house, a joint venture between the Aditya Birla Group and Canada’s Sun Life Financial Services, manages 49 open-ended MF schemes including 26 equity ones 16 debt schemes, six hybrid and one exchange traded fund.

“Some of our schemes belong to the erstwhile Allianz Mutual Fund, which we took over in 2004. Consolidation of schemes not only reduces their number; it also helps the portfolio manager to stay a lot more focused on the scheme portfolio construction strategy and also eases the selection of schemes from the investors’ perspective,” said Balasubramanian.

He added the investors would not be negatively impacted because of the merger. Fund houses have began amalgamating MF schemes after the stock market regulator expressed displeasure over the large number in the market.

According to industry analysts, at least six fund houses have merged their schemes since January 2010. Earlier this year, ICICI Prudential AMC said it would merge ICICI Prudential Fusion-I, ICICI Prudential Equity Opportunities Fund and ICICI Prudential Fusion-III into ICICI Prudential Dynamic Fund.

“Sebi had said too many schemes that appear identical tend to confuse investors. Merger is a welcome move. It benefits investors, as they will have a lesser number to choose from. It also benefits the fund house, because managing a large number of schemes is not always viable,” said Dipali Ranu, mutual fund analyst with Sharekhan.