We
have introduced risk management parameters of our own so as
to raise the bar in our effort to protect the interests of
our investors.
As
per SEBI regulation, the use of derivatives by mutual funds
must be restricted to hedging purposes. Hence, for an Indian
mutual fund, the biggest advantage of using derivatives on
a regular equity/debt portfolio is the opportunity to limit
the downside by hedging. In a market that turns bearish, this
can be a very effective tool. At PruICICI, we use derivatives
adequately and have a resource in our team who specializes
in trading in the derivatives segment.
Further,
Indian fund houses also have the option of introducing products
that employ derivative strategies. For example, a spot-future
arbitrage strategy can be employed on a scheme that seeks
to generate returns through cost of carry on investments.
Our Blended Plan is an example of such a product.
We
have recently rolled out the country's first Charles River
Investment Management System (CRIMS), a state-of-the-art solution,
designed to facilitate error free pre-trade portfolio compliance,
portfolio management and straight through trade order management
(STP). This makes us one of the first mutual funds in the
country to undertake compliance monitoring on a pre-trade
basis.
CRIMS
enables better investment decision-making as it allows us
to apply unique analytical techniques like `what-if' analysis
and portfolio modeling/rebalancing. This helps us slice and
dice the portfolio in several ways to take better investment
calls so as to improve the risk-adjusted performance of our
schemes. |
