CHENNAI, Feb 4: Kothari Pioneer Mutual Fund (KPMF) has been one of the beneficiaries of the measures taken by the Reserve Bank of India to tighten liquidity in the system. Its money market mutual fund - Kothari Pioneer Money Market Account (MMA), like others of its ilk, has seen yields surge on its portfolio.In fact, in a communique, KPMF announced that MMA's yield (annualised) has shot past the 30 per cent level ever since the RBI announcement on January 15. MMA's yield jumped to 28.36 per cent on Friday from 11.19 from January 20. Against the current yield, the fund yielded only 10.29 per cent for the month of December, 10.15 per cent for the last quarter of calendar 1997 and 10.31 since its inception in March 1997.
Investment pattern of the fund has undergone a near total reversal. Till December, 1997, KPMF had kept a major chunk of MMA'a investible corpus, around 85 per cent, in certificate of deposits (CDs) and the rest in the call money market. The pattern today is diametrically opposite. ``Theperformance will be equally good for the coming fortnight,'' said MMA's fund manager R Narayanan. Despite the drop in call money rates during the later part of last week, Narayanan felt that the demand will be quite good.``Call money market rates might not go back to the 100 per cent levels but would definitely continue to rule pretty high,'' he said, adding that the dear money policy was expected to continue, at least till the next government was sworn in. ``All these factors should help MMA,'' he pointed out.
The situation in the money market has also not changed drastically in the past few days, said sources in KPMF and added that they expected call money rates to remain high and the interest rates to harden by around two per cent.Even otherwise, MMA is has been attracting fresh investments, felt Narayanan as the fund's investments are in absolutely safe bets such as certificates of deposits (CDs) and call money instruments, securities of banks and government.
The scheme's corpus has more than trebledfrom September 1997 when it was around Rs 60 lakh. Currently, it stands at over Rs 2 crore, he said. The significant point to note, said Narayanan, is that MMA is being promoted purely as a retail product, and the bulk of unit holders are small investors. As a result, MMA has been successful in earning them returns which are quite difficult to match, he said. KPMF was confident of the fund doing extremely well this year, he said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
