Tata MF to launch global infra fund
Business Standard — August 10, 2007

After kicking off the country's first infrastructure fund four years ago, Tata Mutual Fund is now set to launch a global fund that will invest in stocks of infrastructure companies in other fast-growing economies.

Indo-Global Infrastructure Fund, as the name signifies, will invest 65 per cent of funds in India and the rest 35 per cent in other markets, Ved Prakash Chaturvedi, managing director, Tata Mutual Fund, said on Thursday.

Chaturvedi, who is responsible for making Tata Infrastructure Fund one of the most successful schemes, believes that "infrastructure will be the big story in India and in other parts of the world, which are in same stages of development like India."

Tata Infrastructure Fund gave returns of 66.66 per cent in the past year, beating the Sensex which gained 44.74 in the same period.

BHEL, Larsen & Toubro, ABB Ltd, IDFC, Tata Steel, Punj Lloyd, Century Textiles & Industries, Reliance Industries and ONGC are some of Chaturvedi's favourites, which have contributed to an annualised return of 48 per cent for the infrastructure fund since its inception in 2003. That's also why the global fund will also invest largely in Indian companies.

Chaturvedi is respected for his skills in picking the trends in the mutual fund industry well before most others.

On Thursday, three other funds also have infrastructure schemes and four others are working to launch theirs.

Tata Mutual Fund was also first off the block to launch funds investing in service industries and life science and technology companies.

Most of Tata Mutual Fund's eight schemes have given 45 per cent-plus returns.

Explaining why infrastructure was such a huge phenomenon, Chaturvedi explained: "The main threat to any business is from global imports. But infrastructure is something that cannot be imported. It has to be built locally."

The proposed Indo-Global Infrastructure Fund will focus more on Asia, for Chaturvedi sees more growth in this part of the world.

"We will dedicate a large part of the portfolio to emerging economies as these markets are contributing most to the world's GDP," he said.

For the proposed Indo-Global Infrastructure Fund, Tata Mutual Fund will tie up with separate global fund houses for investments in different markets.

Chaturvedi is, however, concerned about liquidity in the market. "The main worry is that the driver of Indian markets is overseas liquidity, mainly from Japan and the US."

That concern notwithstanding, Tata Mutual Fund is bullish on India. "India will stand out as a market which is more stable than others."

The house is bullish on IT, auto and banking sectors. "Now that interest rates have peaked, I think it's time to look at auto once again," Chaturvedi said.