Prudential-ICICI Mutual Fund 's net assets have jumped 29.18 times over a period of 20 months.

Prudential ICICI MF is a joint venture between Prudential plc of UK and ICICI. The MF manages 10 funds in all, 8 open-ended and 2 close-ended. It has over 250,000 investors.

Prudential-ICICI MF with assets in excess of Rs 46.7 bn has come a long way since its modest start with Rs 1.6 bn in June 1998. Over a period of 20 months, the MF's net assets have rocketed over 29 times (or 2900%) to become the numero uno private MF in the country. The MF now aspires to become the leading MF in the country in terms of net assets (excluding offshore funds). The only fund ahead of it is big daddy - Unit Trust of India.

In an interview with a leading financial daily, Ajay Srinivasan Prudential-ICICI Asset Management Company managing director spoke on the compulsions of fund mangers to perform on a sustained basis with the daily reporting of net asset values (NAVs). With the increase in competition, if fund managers do not perform or even slacken momentarily, there is the chance that investors may move to a better-performing fund.

Some times, this fear pressurises fund managers to buy stocks that may not be fundamentally sound, only so that they can show a high NAV. In the long run, the MF may be saddled with duds, which could become a problem when it wants to dispose these stocks.

Ajay Srinivasan opined that fund managers must select stocks that will work for them at all times and not only in phases. Fund managers must resist the urge to follow the market trend while stock-picking. They must pick stocks that have shown good growth and are likely to perform better in future, regardless of the market trend. If fund managers simply buy stocks to move in sync with the market, volatility in the market will be reflected in their portfolios, which could be unsettling for investors.

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