Mutual Fund houses appointing two fund managers to manage large schemes

The mutual fund houses are revising the management for their flagship schemes by appointing two fund managers for managing large schemes. Recently, DSP BlackRock Mutual Fund appointed Resham Jain as co-fund manager of DSP BlackRock Small and Midcap Fund and DSP BlackRock Micro Cap Fund. Vinit Sambre was solely managing DSP BlackRock Small and Midcap Fund since July 2012 while Vinit Sambre and Jay Kothari jointly manage DSP BlackRock Micro Cap Fund. The AUM of these two funds were at Rs 5,390 crore and Rs 6,206 crore, respectively, as on February 2018.

“Fund houses are getting a co-fund manager as they want to ensure that there is no risk of strategy and style in a fund if one fund manager out of the two quits,” said Vidya Bala, Head of Mutual Fund Research, Funds India.

Among other big fund houses, UTI Mutual Fund has also appointed co-fund managers to oversee its large funds, while among the small ones, DHFL Pramerica Mutual Fund and Principal Mutual Fund have also appointed additional fund managers. UTI Mutual Fund has appointed an additional fund manager to manage two of its schemes. Vetri Subramaniam and Amit Premchandani have been co-managing UTI Opportunities Fund, while Lalit Nambiar and Vishal Chopda have been co-managing UTI India Lifestyle Fund.

To ensure that all schemes launched by mutual funds are distinct in terms of asset allocation and investment strategy, SEBI proposed categorisation and rationalisation of mutual fund schemes. The SEBI prescription allows fund houses to offer schemes in 10 types of equity funds, 16 categories of bond funds and 6 categories of hybrid funds.

SEBI has clearly defined norms and the asset allocation and the norms that will specify each category. For example, a large cap fund must invest at least 80 percent of the money in large cap stocks. Large cap stocks are defined as top 100 companies in terms of full market capitalization.