Few Investors Hold Chunk Of Mfs

A large number of mutual funds have schemes wherein just a single large investor holds almost the entire portfolio or a significant chunk of their holdings. The leading fund in this respect is IDBI Mutual Fund which has seven schemes with one or two investors holding almost the entire portfolio.

According to published financial statements, apart from IDBI Mutual Fund, other funds in the same boat are JM Mutual Fund, Templeton Mutual Fund, Shriram Mutual Fund among others.

The seven schemes of IDBI Mutual Fund are - IDBI-Principal's Money at Call Dividend Plan where one particular large investor holds 61.45 per cent of the total assets. Its Balanced Fund dividend Plan has two large investors holding more than 80 per cent of the portfolio. Its Index Fund functions almost like a portfolio management service since a single investor holds 96.80 per cent of the assets.

So also does the Money Market Fund where one investor has subscribed to more than 96 per cent of the assets of the scheme. A single investor holds nearly 40 per cent of the assets of Deposit Fund Bond (Growth) while another single investor holds more than 72 per cent of the assets in Growth Fund Dividend Plan.

JM Mutual Fund has ten schemes with one or two large investors holding significant chunks, out of which five are serial plans. The other schemes are -- JM Equity Fund Growth Plan (36.72 per cent), JM Liquidity Fund dividend Plan (27.77 per cent), Liquidity Growth Plan (44.9 per cent), G-Sec Fund Regular Plan growth (43.96 per cent) and JM Basic Fund (76.21 per cent by two investors).

Templeton's Franklin Index Tax Fund has a single investor holding around 68 per cent of the assets of the scheme. Similarly, Shriram Mutual Fund's Interval Fund '97 has a single investor holding 85 per cent of the assets, according to published fund financial statements.

Incidentally, this is for the first time that funds are giving details of investors who hold more than 25 per cent of the net assets of the scheme, in their annual financial statements.

While there are no Securities and Exchange Board of India (Sebi) rules regarding how much of the assets can be held by a single investor, Sebi officials admitted that the very definition of mutual funds meant a large and diversified pool of investors subscribing to the assets of the fund or scheme.

However, Sebi sources said that as of now there was no move to put a cap on the subscriptions by a single investor, though disclosures in this respect were being insisted on.

Fund officials admitted that large corporates were indeed the major subscribers to their schemes - "in the absence of retail interest, we have no choice but to let corporates subscribe to the schemes," an official said. He agreed that the exit of such investors would impact the net asset value negatively but "not to any significant extent."

Officials said that they hope to reverse the trend and have a higher proportion of retail investor base "but it will take some time to do it." The figures are as of March-end 2001 but there has been no significant change in the holdings so far, they clarified.