Domestic fund houses are trying to replicate the success of new fund offers of some of their peers. Attracted by the amount of funds collected by the peers, the fund houses are launching similar sounding schemes.

UTI Mutual Fund, which already has a highly successful infrastructure fund, has recently launched UTI Infrastructure Advantage Fund-Series 1. The strategy on stock selections and even the stock pickings on both funds remain more or less the same.

Similarly, AIG Mutual Fund has filed documents to launch its Gold Fund, following DSP-Merrill Lynch, which has collected over Rs 1,000 crore (Rs 10 billion) through its World Gold Fund, making it the first fund house in India that would invest in stocks of gold mining, processing and marketing companies across the world.

AIG Mutual Fund is also following similar strategies, according to its filings.

After DSP-Merrill Lynch launched a Small and Micro-Cap Fund last year, DBS Chola launched its small-cap fund. Standard Chartered Mutual Fund has now filed documents for its small- and mid-cap fund.

Similarly, after the success of Reliance [Get Quote] Diversified Power fund, Escorts and Sahara Mutual Funds have filed offer documents for a power fund.

Recently, ING launched its Global Real Estate Fund, after which Principal PNB Fund House filed for a global real estate fund, which will invest in REITs and REOCs (Real Estate Operating Companies).

Dhirendra Kumar, CEO, ValueResearch Online, a fund tracking firm, says: "This has always been the trend. Mutual funds try to emulate the success of best performing funds by launching similar schemes.

After energy and power becoming one of the hottest sectors now, UTI Mutual Fund converted its Petro Fund to UTI Energy Fund. Sundaram-BNP recently launched one and DSP Merrill Lynch has filed its draft offer."

This was because fund houses always mop-up more money in the form of an NFO, rather than existing ones.

"Though it becomes repetitive, fund houses do not mind it till the money is coming and investors flock in because they get the units cheaply. However, it is a misconception because Indian investors have a wide area of funds to choose from and there are several good ones too in the list. You are not deprived of any special opportunity and you are unlikely to miss anything by ignoring the NFOs."

Another strategy used by mutual funds is in capitalizing on popular themes in the market to catch investors' eye.

For instance 'opportunities' has become a popular theme for most of the fund houses as almost all mutual funds have an 'opportunities' or 'unique opportunities fund' in their kitty.

Opportunities actually mean prudent stock picking from among various sectors by fund managers.