Taurus MF added Rs 1,184 crore of assets last year at a time when many AMCs lost ground. Eight out of 13 Taurus funds have bagged five-star ratings from Value Research. Taurus Ethical Fund recently debuted as a four-star rated fund. Waqar Naqvi, CEO, Taurus Mutual Fund, believes that there is no substitute for fund performance.
Considering that businesses today are diversified and engage in many activities, does it become difficult to find Shariah-compliant companies?
There are enough Shariah-compliant companies available. We had done a comprehensive study of the stocks available in India and the performance of similar funds in Europe and the US over a specific period and we are glad that our findings and conclusions were vindicated. Taurus Ethical Fund has been in existence for three years; its performance has been very good. It recently received a four-star rating from Value Research.
Given the restrictions in a Shariah-compliant fund, is it challenging to build or shuffle portfolios?
You do not have to do a lot of changes in the portfolio of a Shariah fund. We follow the S&P CNX 500 Shariah Index as it exists in India—that is our stock universe. Since most of the companies existing in this space are not paying noticeable interest, they are generally stable and keep doing well. We keep almost 75% of our portfolio constant unless some major change dictates that we shuffle more than required, which will also be a temporary phenomenon.
How has been your experience in gathering assets in a Shariah fund? How can they be made more popular? Are you looking to launch any campaign in this regard?
We have not sold the Taurus Ethical Fund as a Shariah-compliant fund, although it is one; the fund is India’s first open ended Shariah compliant fund. We treat it like any of our existing funds, so there is no difference in the way we go about gathering assets. Fund performance speaks for itself; you don’t need any other push for popularity. Taurus Ethical Fund has grown every year and is getting noticed.
Given the dynamics of the business, how has your profitability been affected in FY12? Taurus’ net profit fell to Rs 4 lakh in FY11 from Rs 2 crore in FY10. What caused the slip?
It is a challenge to remain profitable, given the current market scenario. While we have grown year after year in terms of AUM, our profitability in FY12 will not be as good as FY11, but we have suffered negligible losses because of our superb team. We stick to the basics and strive hard to achieve the best for our investors. Out of 13 schemes, we have eight schemes with 5-star ratings (seven rated by Value Research and one by ICRA).
Given the consolidation happening in the MF industry, will you be looking for a foreign partner? Are you looking at acquiring any AMCs?
We are open to acquiring a company provided we get good value for money. We have not applied our minds towards tying up with a foreign partner.
Taurus added Rs 1,184 crore in assets in the last year when most AMCs saw their asset base shrink. In which category of funds did you receive inflows? How did you achieve it?
We saw all our asset classes grow in terms of net addition (excluding market action). So, our team is happy that we grew across equity schemes, ELSS (Taurus Tax Shield which is again a 5-star rated fund), MIP (Taurus MIP Advantage Fund which is rated 5-star by ICRA), debt funds, liquid funds and FMPs. Apart from the schemes mentioned above, we also have Taurus Starshare (3-star rating), Taurus Infrastructure Fund (rated 5-star by Value Research), Taurus Liquid Fund and Taurus Ultra Short Term Bond Fund (both rated 5-star by Value Research). Our coordinated approach across various departments in Taurus has paid off, and we stuck to the basics.
What are your views on the current commission structure of distributors? How should AMCs frame a payout structure which is fair to all stakeholders?
It is abundantly clear that no business—financial services or otherwise—will grow without compensating distributors. Distributors have also understood that the MF Industry is passing through a tough phase and they understand. As far as framing a payout structure is concerned, the market dynamics and the system will be deciding factors.
What is the roadmap for Taurus in the current fiscal?
We will stick to the basics. We have launched the Taurus BFSI Fund and we may launch a few more funds to complete our product basket. Other than this, our belief remains firm that we should persevere and work hard in a disciplined manner since differentiations today can be created over the long term. Brand building is more a function of performance and achievement of milestones through superior performance. Hence the focus will remain on these aspects.
