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Mutual Fund Newsletter October 08 to October 12, 2012

India Infoline News Service/ 14:51 , Oct 12, 2012

The Securities and Exchange Board of India (SEBI) in its board meeting has proposed bring more classes of financial products, including insurance policies and fixed deposits, under the ambit of asset categories that can be held in demat or electronic form.

Top Stories

SEBI issues rules to reject draft offer plans

Capital market regulator SEBI (Securities and Exchange Board of India) has issued a general order with rejection criteria for draft offer documents for the protection of interest of investors.

 

The SEBI order said, “The Board does not regulate on merits or approve, document of offer / issue of securities, but only mandates true, fair and adequate disclosures including the possibility of a sanction where entities are put on notice for applying due diligence and caution while taking a decision to subscribe to the issue. The Board issues a letter of observation(s) specifying changes about disclosures and accordingly, the offer document is required to be modified.”

 

According to SEBI, companies that have circular transactions to build up capital (issue of warrants with a buyback clause upon conversion to equity), unidentifiable ultimate promoters and non-compliance with regulations on promoter contribution would be rejected.

 

“In case of rejection of draft offer document, the communication in writing shall contain the reasons,” the SEBI order added… Read more

 

AMCs to reduce upfront commission: Reports

Capital market regulator SEBI’s (Securities and Exchange Board of India) latest guidelines mentioned that, the exit load—which asset management companies (AMCs) charge—will be ploughed back into the scheme, and not added to the balance sheet, as was done earlier.

The move is expected to improve the NAVs (net asset values) of the schemes for investors. But AMCs’ balance sheets will lose out on one component of income, according to media reports. While details of the guidelines are not yet finalised, AMCs are discussing about reducing upfront commission to ensure there isn’t an adverse impact on their profits… Read more

Banks stand first among commission earners for MFs: Reports

Banks rank first in terms of earning commissions from sale of mutual fund schemes. According to the recent disclosure of commission & expenses paid by several asset management companies (AMCs) to their mutual fund distributors, seven banks stand among the top-ten commission earners for mutual funds, the media reports said.

These banks include HSBC, HDFC Bank, Citibank, Standard Chartered, Axis, ICICI and Kotak Mahindra top the chart for the last financial year ended 31 March 2012, the reports added… Read more

SEBI proposes demat form for FDs, insurance policies

The Securities and Exchange Board of India (SEBI) in its board meeting has proposed bring more classes of financial products, including insurance policies and fixed deposits, under the ambit of asset categories that can be held in demat or electronic form.

“There have been demands for dematerialization of assets/records other than securities, such as, warehouse receipts, fixed deposits with banks and corporates, insurance policies, investment products of post office, etc,” the SEBI press release said on 6th October… Read more

Equity asset base of MFs rises 6.3% in Sept: Reports

Due to rise in markets, equity asset base of mutual fund schemes increased 6.3%, while the benchmark index rose 8.5%. The equity assets under management (AUM) rose to Rs. 1.62 trillion in September 2012 from Rs. 1.53 trillion in August 2012. The total AUM of the mutual fund industry declined 4.3% to Rs. 7.2 trillion in September from Rs. 7.52 trillion in August, according to AMFI data.

The decline in the AUM of the industry was on account of outflow of funds from the system as banks and companies close their half-yearly accounts, the media reports said… Read more

Domestic AMCs report 12.75% rise in AUM for first half

Average AUM (assets under management) of domestic mutual fund houses registered a 12.75% increase in April-September period of the current financial year 2012-13. In the same period, foreign asset management companies’ AUM was 9.91%, the media reports said.

According to AMFI (Association of Mutual Funds in India) data, in the first half of the current financial year, average AUM of domestic fund players increased 12.75% to Rs. 6.61 trillion against Rs. 5.86 trillion in FY11-12. On the other hand, assets of foreign AMCs increased 9.91% to Rs. 862.1 billion from Rs. 784.36 billion… Read more

AMCs hike expense ratios in MF schemes from 1st Oct

Asset management companies (AMCs) have started communicating to their investors and distributors through emailers about the increase in expense ratios in schemes from 1st October.

AMCs have raised the total expense ratio (TER) in equity schemes to 2.7% and 2.45% in debt schemes as an enabler clause to their scheme information documents. Earlier, AMCs were charging a maximum of 2.5% as TER on equity funds… Read more

Trivia

7 out 10 Internet users change their mind about products

With over 99 million urban Indian users now active on the Internet, financial services need to adopt a new approach to engage and serve the needs of the digitally savvy customers. This was revealed today in a report compiled by Google India on the financial service industry by combining the Google search trends in India and an independent research report conducted by TNS Australia on the influence of Internet on the purchase decision of financial products by Indian Internet users… Read more

Domestic News

SEBI relaxes investment limit for HFCs in debt MFs

The SEBI Board took the following important decisions: Amendments to the provisions relating to prudential limits for sectoral exposure in debt oriented mutual fund schemes.

Considering the important role played by Housing Finance Companies (HFCs) in fulfilling the social objective of increased home ownership and supporting the economy by creating demand for construction of new homes, it has been decided that an additional exposure to financial services sector (over and above the existing 30%) not exceeding 10% of the net assets of the scheme in debt oriented mutual fund schemes will be allowed by way of increase in exposure to HFCs only, subject to the condition that such securities issued by HFCs are rated AA and above and these HFCs are registered with National Housing Bank (NHB)… Read more

SBI, L&T MF discontinue 19 schemes

SBI Mutual Fund and L&T Mutual Fund have informed the BSE (Bombay Stock Exchange) that 10 schemes of SBI MF and nine of L&T MF would be discontinued for fresh SIP (systematic investment plan) registration and subscription. The two fund houses have discontinues the schemes to comply with SEBI (Securities and Exchange Board of India) ‘one-plan, one scheme’ guidelines.

Earlier this month, five asset management companies (AMCs), including major players like Reliance and ICICI Pru MF, HSBC, Morgan Stanley and IDFC had listed out a total of 190 schemes that have been discontinued for fresh SIP investments to comply with SEBI guidelines… Read more

SEBI opens office in Assam

The Securities &Exchange Board (SEBI) has opened an office in Guwahati, Assam. The regulator plans to gradually open offices various areas of Northeast India. The Assam government said that it will soon come up with laws to control unregulated financial bodies. SEBI has prepared plans to work with the state to channelize savings to financial market.

AUM under gold ETFs crosses Rs. 110bn: AMFI

The size of assets held through gold exchange traded funds (ETFs) have reached an all-time high of Rs. 11,198 crore, as investors continue to seek refuge in the yellow metal amid persistent concerns about slowdown in the economy.

According to data compiled by the Association of Mutual Funds in India (AMFI), the assets under management (AUM) of gold ETFs crossed the Rs. 11,000 crore mark in September from Rs. 10,701 crore in August… Read more

Equity MFs redemptions increase to Rs. 33.06 bn in Sept

According to Association of Mutual Funds in India (AMFI) data, net redemptions from equity mutual funds increased to Rs. 33.06 billion in September 2012, as retail investors sold their schemes after a strong rally in stock markets.

Investors have been redeeming their mutual fund schemes for a fourth month in a row. Redemption in funds increased despite equity schemes registering their best returns in September 2012. Retail investors offloaded bulk of their investment which they had invested in equity schemes in 2007-08… Read more

Topline earnings growth should remain robust: Franklin Templeton Investments

In line with trends seen in the previous few quarters, margin pressures will likely persist, but topline earnings growth should remain robust, especially in the FMCG/consumer goods space. Data indicates growth in capex/infrastructure project implementation remains weak and in that sense, earnings for the sector could continue to be under pressure. Overall, given the current macro-economic environment, big upside surprises on earnings are less likely this financial year… Read more

Total AUM of MF industry declines 4.3% in Sept 2012

Total assets under management (AUM) of the mutual fund (MF) industry declined by 4.3% (by Rs. 32435 crore) to Rs. 7.2 lakh crore in September 2012, due to huge outflow from liquid funds.

AUM of Liquid Funds fell sharply by 25.2% (by Rs. 48791 crore) to Rs. 1.44 lakh crore in September and moreover it reported net outflow of Rs. 48445 crore, which being the highest in the last six months. AUM of Income Funds rose up for the sixth consecutive time in September, it increased by 0.9% (by Rs. 3011 crore) to Rs. 3.52 lakh crore in September. However, this category witnessed net outflow of Rs. 256 crore and the net outflow from this category has been after five months… Read more

Learning

Which one to choose: Growth or dividend option?

While investing in a mutual fund scheme, we often get confused when asked to select among ‘growth’, ‘dividend’ and ‘dividend reinvestment’ option. If you don’t select any of these options, the fund house will select the default option for that scheme as mentioned in the application prospectus. However, you can always change the option later… Read more

Financial planning for the youth of India

The Indian youth never had it so good. On the consumption side, the choice of goods & services available is unprecedented. And as far as income is concerned, given the blooming economy & its ever improving prospects, opportunities have ever been better! So, the youth is earning a lot & spending a lot! It’s definitely a happy situation to be in!... Read more

Preparing for financial issues after death of spouse

The loss of a loved one in the family is sure to be very stressful, but lack of knowledge of the things to do with the deceased’s finances can be equally stressful. More often than not, individuals undergo a lot of pain in complying with the paper work to get back what is legally theirs… Read more

How to redress your grievances with SEBI

There will be occasions when you have a complaint against a listed company / intermediary registered with SEBI (Securities and Exchange Board of India). In the event of such complaint you should first approach the concerned company / intermediary against whom you have a complaint. However, you may not be satisfied with their response. Therefore, you should know whom you should turn to, to get your complaint redressed… Read more

Special Stories

Investors to get trade alerts through SMS, email: SEBI

In a circular, SEBI (Securities and Exchange Board of India) has asked stock exchanges to send SMS / email alerts to retail investors for all transactions done in their names in a day. The regulator’s decision is based on the complaints it received against brokers and other market organizations who are conducting transactions through their clients’ accounts without informing them.

Both the stock exchanges—National Stock Exchange (NSE) & Bombay Stock Exchange (BSE)—would send the transaction details through SMS / email to all retail investors based on the client data uploaded by the stock brokers on the stock exchange system… Read more

NFOs

ICICI Pru Interval Fund II-Quarterly Interval Plan F announces dividend

ICICI Prudential Mutual Fund has announced 11 October 2012 as the record date for declaration of dividend under the dividend option of ICICI Prudential Interval Fund II-Quarterly Interval Plan F… Read more  

SBI Debt Fund Series–18 Months–11 floats on

SBI Mutual Fund has launched SBI Debt Fund Series-18 Months-11, a close-ended debt scheme with the duration of 18 months. The new issue will be open for subscription from 16 October and close on 19 October 2012… Read more

JPMorgan MF announces change in exit load

JPMorgan Mutual Fund have decided to modify the exit load structure for JPMorgan India Equity Fund, JPMorgan India Smaller Companies Fund, JPMorgan JF Greater China Equity Off-shore Fund, JPMorgan JF ASEAN Equity Off-shore Fund and JPMorgan Emerging Europe, Middle East and Africa Equity Off-shore Fund from 12 October 2012… Read more

ICICI Pru MF launches three year fixed maturity plan

ICICI Prudential Mutual Fund has launched ICICI Prudential Fixed Maturity Plan-Series 65-3 Years Plan A, a close ended debt scheme. The tenure of the scheme is 1,098 days. The new issue will be open for subscription from 16 October and will close on 18 October 2012… Read more

Tata MF announces dividend under Tata Equity P/E Fund

Tata Mutual Fund has announced 12 October 2012 as the record date for declaration of dividend under dividend trigger option A-5% & dividend trigger option B-10% of Tata Equity P/E Fund… Read more

ICRA assigns credit risk rating of [ICRA]AAAmfs to HDFC schemes

ICRA has assigned credit risk rating of [ICRA]AAAmfs to HDFC Medium Term Opportunities Fund (HDFC-MTOF) and HDFC Short Term Opportunities Fund (HDFC-STOF). The schemes with this rating are considered to have the highest degree of safety regarding timely receipt of payments from the investments that they have made… Read more

Kotak MF announces dividend

Kotak Mutual Fund has announced 17 October 2012 as the record date for declaration of dividend under the dividend option of Kotak Quarterly Interval Plan Series 5. The quantum of dividend per unit will be entire appreciation in Net Asset Value of dividend option until 10 October 2012 on the face value of Rs. 10 per unit.

HDFC MF announces maturity proceedings of HDFC FMP 25M Sept 2010

HDFC Mutual Fund has fixed 12 October 2012 as the record date for the purpose of determining the eligible unitholders/beneficial owners holding units (in demat form) of HDFC FMP 25M September 2010-HDFC Fixed Maturity Plans-Series XV, a closed-ended income scheme, who would be entitled to the maturity/redemption proceeds on the maturity/final redemption date… Read more

Canara Robeco MF announces change in board of directors

Canara Robeco Mutual Fund has announced change in constitution of the board of directors of the AMC. Accordingly, Mr S Raman, Chairman & Associate Director has resigned from the board of AMC. All refernces to him in all scheme related documents, therefore, stand removed.

IDFC MF announces change in exit load

IDFC Mutual Fund has announced change in exit load under IDFC Super Saver Income Fund-Short Term from 8 October 2012… Read more  

HDFC MF announces dividend under 2 schemes         

HDFC Mutual Fund has announced 16 October 2012 as the record date for declaration of dividend under Normal Dividend Option and Quarterly Dividend Option of HDFC FMP 370D October 2011 (1), a fixed maturity plan under HDFC Fixed Maturity Plans-Series XIX and HDFC FMP 91D July 2012 (1)- HDFC Fixed Maturity Plans-Series 22, closed ended income schemes… Read more

DSP BlackRock FMP-Series 14-12M announces dividend

DSP BlackRock Mutual Fund has announced 15 October 2012 as the record date for declaration of dividend under the dividend payout option of DSP BlackRock FMP-Series 14-12M, a close-ended income scheme. The quantum of dividend on the face value of Rs. 10 per unit will be up to 100% of distributable surplus as on record date. The scheme maturity date is 15 October 2012.

ICICI Pru Medium Term Plan announces change in exit load

ICICI Prudential Mutual Fund has announced change in exit load under ICICI Prudential Medium Term Plan from 11 October 2012… Read more

ICICI Pru Interval Fund-Annual Interval Plan II announces dividend

ICICI Prudential Mutual Fund has announced 16 October 2012 as the record date for declaration of dividend under the dividend options of retail and institutional plans under ICICI Prudential Interval Fund-Annual Interval Plan II… Read more

Franklin Templeton to launch Franklin Templeton Fixed Tenure Fund

Franklin Templeton Investments (India) has launched Franklin Templeton Fixed Tenure Fund–Series XVII (3 Years Plan). It is a closed end income fund that seeks to provide investors returns along with capital appreciation through equity exposure… Read more

HDFC FMP 25M September 2010 announces dividend

HDFC Mutual Fund has announced 15 October 2012 as the record date for declaration of dividend under normal and quarterly dividend options of HDFC FMP 25M September 2010. The amount of dividend per unit on the face value of Rs. 10 per unit will be distributable surplus, as reduced by applicable statutory levy.

SBI Debt Fund Series-367 Days-7 announces dividend

SBI Mutual Fund has announced 15 October 2012 as the record date for declaration of dividend under the dividend option of SBI Debt Fund Series-367 Days-7. The quantum of dividend per unit on the face value of Rs. 10 per unit will be entire distributable surplus as on record date… Read more

Franklin Templeton MF announces maturity of plans

Franklin Templeton Mutual Fund has announced maturity of growth and dividend options of Franklin Templeton Fixed Tenure Fund-Series XII-Plan A… Read more

Franklin Templeton to launch Fixed Tenure Fund-Series-XVII

Franklin Templeton Investments (India) has launched Franklin Templeton Fixed Tenure Fund- Series XVII (3 Years Plan). It is a closed end income fund that seeks to provide investors returns along with capital appreciation through equity exposure. The New Fund Offer period is from 13 October 2012 to 27 October 2012 and the allotment date will be 2 November 2012. Units will be available at Rs. 10 (per unit) for cash during the New Fund Offer… Read more

Reliance Fixed Horizon Fund XX Series 15 announces dividend         

Reliance Mutual Fund has announced 15 October 2012 as the record date for declaration of dividend under the dividend option of Reliance Fixed Horizon Fund XX Series 15. The amount of dividend per unit on the face value of Rs. 10 per unit will be entire distributable surplus available in the scheme as on the record date… Read more

HDFC MF announces maturity of HDFC FMP 370D October 2011 (1)

HDFC Mutual Fund has announced that the Record Date for the purpose of determining the eligible unit holders/beneficial owners holding units (in demat form) of HDFC FMP 370D October 2011 (1)-HDFC Fixed Maturity Plans-Series XIX, a closed-ended income scheme, who would be entitled to the maturity/redemption proceeds on the maturity/final redemption date shall be 15 October 2012… Read more

DSP BlackRock MF announces maturity of FMP-Series 14-12M

DSP BlackRock Mutual Fund has announced that the record date for the purpose of determining the eligible unit holders/beneficial owners holding units (in demat form) of DSP BlackRock FMP-Series 14- 12M, a closed-ended income scheme, who would be entitled to the maturity/redemption proceeds on the maturity/final redemption date shall be 11 October 2012… Read more

Birla Sun Life Fixed Term Plan-Series DQ announces dividend

Birla Sun Life Mutual Fund has announced 15 October 2012 as the record date for declaration of dividend under the dividend option of Birla Sun Life Fixed Term Plan-Series DQ… Read more

ICICI Pru Interval Fund-Annual Interval Plan II announces dividend

ICICI Prudential Mutual Fund has announced 15 October 2012 as the record date for declaration of dividend under the dividend options of ICICI Prudential Interval Fund-Annual Interval Plan II. The recommended rate of dividend per unit on the face value of Rs. 10 per unit will be Rs. 0.05 per unit each retail and institutional plan.

JM Financial MF announces change in scheme name

JM Financial Mutual Fund has announced change in the name of following schemes. Accordingly, the existing and proposed name will be… Read more

AIG Global Investment renamed as PineBridge MF

AIG Global Investment Group Mutual Fund has been renamed as PineBridge Mutual Fund, with effect from 6 October 2012… Read more

New appointments

AMFI re-elects Milind Barve as chairman

The Association of Mutual Funds in India (AMFI) on 5th October said the board of directors have re-elected Milind Barve as its chairman. Mr Barve is the managing director of HDFC Mutual Fund… Read more

Greg Johnson gets second term as ICI Chairman

The Investment Company Institute’s Board of Governors has elected ICI Chairman Greg Johnson to serve an additional one-year term.  In addition, the ICI membership elected a slate of Governors.

“I am honored to be elected by the Institute’s Board for a second term as Chairman,” ICI Chairman Greg Johnson said. “Mutual funds continue to be one of the most important and accessible investment vehicles for individuals to build wealth and save for retirement. I look forward to continuing to work with ICI’s Board and the membership to respond to the important issues facing our industry and its shareholders.”… Read more

International news

Vanguard faces 20-minute system outage

After India’s ‘flash crash’ on Friday, clients of Vanguard Group Inc., America’s biggest mutual-fund firm, were not able to access their accounts to make trades for a 20-minute period on Monday morning due to a system outage, reports said.

“We had a system outage this morning that did impact our shareholders’ ability to access their account-related data,” said Katie Henderson, a spokeswoman for the company. About 20,000 customers may have been trying to access their accounts at the time, added John Woerth, a Vanguard spokesman… Read more

 

 

 

 

 

 

 



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