The Future of Fund Management in India 1998
Bombay, 16th & 17th April 1998

"Opening Session"
16th April, 1998, 9.50 am to 11.00 am

Welcome Address
Mr. Gautam Bhardwaj
Managing Director, Invest India Economic Foundation

Inaugural Address
Mr. G.P. Gupta
Chairman,Unit Trust of India

Keynote Address
Mr. Leo Melamed
Chairman Emeritus, Chicago Mercantile Exchange


"Luncheon Address"
16th April, 1998, 11.30 am to 12.00 noon

Prospects for Mutual Funds in the 21st Century
Mr. Pratip Kar
Executive Director, Securities and Exchange Board of India

"Performance Evaluation"
Technical Session 01, 16th April, 1998, 1.00 pm to 2.40 pm

Measurements, of expenses, portfolio turnover, best price and execution, valuation and performance, are essential to effective fund management. This session focuses on measurement and management and their impact on marketing. It describes how the fund industry can utilise the best management tools to create value, maintain high professional standards, and meaningfully convey its performance to the investing public.

Transaction costs have a profound impact upon fund management. These costs have the potential to covert excellent performance - on paper - into abysmal returns as measured by NAV. high costs also influence the style of the manager by reducing the incentives to trade. Mr. Ravi Narain will talk about how transaction costs of the typical dealing room can be measured, benchmarked, and minimised.

Globalisation means that there is an increasing amount of convergence in the methods of money management. Insider information matters less and less, though still obviously important. Fundamentals, along with a healthy dose of technicals now account for sound investment and returns. Why the system has not worked to date, at least according to many mutual funds operating, will also be discussed.

Mr. Leo Melamed is one of the founding fathers of financial derivatives in the world. He will look at the role for derivatives in the globally integrated financial system.

How will India deal with the needs of its ageing population? Does it have the resources systems or, more importantly, the will to take the steps necessary to provide for their future well-being? How should fiscal policy be changed to encourage investment in pension funds, individual retirement accounts and other means to ease the burden? This session will describe the dimensions of the challenge and suggest reforms that offer a significant role for the mutual fund industry in addressing these concerns.

Infrastructure financing is a sector where high risk and long term investments are required. Owing to the shortage of infrastructure in India, high rates of return can be obtained, and enormous funds can be deployed. Dr. Rakesh Mohan will describe the big picture of infrastructure financing, and the emerging opportunities for investors in this sector.

The growth of a competitive mutual fund industry has been hampered by the lack of a co-ordinated industry-wide marketing campaign and the failure to devote sufficient attention to customer services. Obstacles have included investor misunderstanding and short term views of performance, failure to present the product in a uniform fashion, confusion of securities with fixed deposits and insurance products, lack of trained and licensed intermediaries, as well as delays and uncertainty over the ability of "guaranteed" schemes to make good on their promises. This session will describe the steps the industry can take to re-design and improve its distribution effort.

The mutual fund industry is being transformed by fundamental developments, such as the integration of domestic and global markets, the gradual onset of capital account convertability and the growth of derivatives markets. In this session, we look into the crystal ball and ask how these factors will influence the public's trust and confidence in the fund industry and ultimately its growth.