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Mutual Fund Newsletter - September 10 to September 14, 2012

India Infoline News Service/ 17:30 , Sep 14, 2012

To increase penetration of mutual fund products and to energise the distribution network while protecting the interest of investors, SEBI held a series of meetings with various stakeholders in the mutual fund industry.

Top Stories

SEBI implements steps to re-energise MF industry

To increase penetration of mutual fund products and to energise the distribution network while protecting the interest of investors, SEBI held a series of meetings with various stakeholders in the mutual fund industry.

Mutual Fund Advisory Committee (MFAC) also offered its recommendations on issues confronted by the industry. Pursuant to SEBI Board’s approval to various recommendations, it has been decided to implement the following: Additional TER (total expense ratio) can be charged up to 30 basis points (bps) on daily net assets of the scheme, if the new inflows from beyond top 15 cities are at least 30% of gross new inflows in the scheme or 15% of the average assets under management (year to date) of the scheme, whichever is higher… Read more

SEBI restricts fund houses from overexposing to debt schemes         

Time and again capital market regulator SEBI (Securities and Exchange Board of India) has restricted fund houses from overexposing their debt schemes to any single sector.

Recently, SEBI had told several fund houses that their NFOs (new fund offerings) would be approved only after they agree not to allocate more than 30% of the money in a particular industry. Debt funds constitute over 60% of mutual funds’ (MF) assets under management… Read more

Equity MFs witness net inflows of Rs. 1.21 bn in FY12

Private sector mutual funds contributed majorly to the redemption, with a net outflow of resources from all mutual funds at Rs. 220.23 billion in 2011-12 compared to a net outflow of resources of Rs. 494.06 billion in 2010-11, according to capital market regulator SEBI (Securities and Exchange Board of India) Annual Report 2011-12.

Scheme-wise pattern reveals that there were huge redemptions from income/debt oriented schemes during 2011-12. But the net redemptions from these schemes were lesser in 2011-12 than the previous financial year (2010-11)… Read more

Reliance Capital invests Rs. 40 Cr in Century Real Estate

Anil Ambani’s Reliance Capital has invested Rs. 40 crore in Century Real Estate. The transaction was closed last week. Reliance Capital will further invest Rs. 160 crore in the realty company. The funds would be used for Century Real’s upcoming residential projects.

Century Real would invest the funds for development of its Phase-II 500 unit residential project in Rajarajeshwari Nagar in Bangalore. Century Real Estate is an integrated full-service real estate development company headquartered in Bangalore.

MFs report net outflow of Rs. 220 billion in FY12

Mutual funds saw a continuing trend of net outflow of resources during 2011-12, according to capital market regulator SEBI (Securities and Exchange Board of India) Annual Report 2011-12.

Private sector mutual funds contributed majorly to the redemption, with a net outflow of resources from all mutual funds at Rs. 220.23 billion in 2011-12 compared to a net outflow of resources of Rs. 494.06 billion in 2010-11… Read more

MF industry witnesses inflows of Rs. 198 billion in August

In August 2012, the mutual fund industry witnessed inflows of Rs. 198 billion. During August, equity mutual funds reported outflows for the third consecutive month at Rs. 23.7 billion—a six-month low, according to media reports.

Investments into fixed income funds remained up at Rs. 222.1 billion. Year-to-date, equity funds have registered outflows, while fixed income funds have recorded inflows in six out of eight months, the reports added… Read more

Learning

Options strategy: Get insurance for your portfolio!

A couple, who had invested a major chunk of their savings into presumably strong and safe blue chip stocks, had to rework their retirement plans as the stock markets were down for a long period.

Similarly, plans of parents—who had invested 60% of their savings in stocks portfolio for higher education of their 16-year-old child—had gone haywire because they had invested their savings in the market for too long—instead of taking it out at least three years before they needed it… Read more

How to optimise asset allocation?

Many models & techniques can be used to arrive at making tactical adjustment in clients’ asset allocation decisions, Gurpreet Singh points out… Read more

Merits of global investing

Globalisation continues to work its way through our lives—it has changed the way we shop, eat, communicate, travel and generally live. As economies and societies integrate, the world is shrinking but this in turn is throwing up more opportunities for businesses and investors alike. By its very nature, globalisation has made investing-only-in-home markets less relevant… Read more

Fund Managers’ Speak

 

The winds of market change: Mark Mobius

As we cross the mid-way point of the year, you might say the equity and fixed income markets have been a lot like the recent weather in much of the world: uncertain, and tending toward extremes. The perception of a stormy economic climate has driven some equity valuations to extremely low levels, particularly in Europe, and investors have been pouring into fixed income despite extremely low yields… Read more

The incentivisation of sales staff are consumers getting a fair deal?

We all know what it is like to walk into a bank to do something simple, like pay a credit card bill, only for the person behind the counter to ask if you would like to extend your credit, take out more insurance or look at their competitive mortgage rates? I only have a credit card to shop online, Martin Wheatley says… Read more

Domestic News

AUM of fund houses declines 0.8% to Rs. 5,872 bn in March 2012

The gross mobilisation of resources by all mutual funds during 2011-12 was at Rs.  68.2 trillion compared to Rs. 88.6 trillion during 2010-11 indicating a decline of 23% over the previous year, according to capital market regulator SEBI (Securities and Exchange Board of India) Annual Report 2011-12.

Redemption also declined by 23.2% to Rs. 68.42 trillion in 2011-12 from Rs. 89.1 trillion in 2010-11. The mutual fund segment recorded a net outflow of Rs. 220.24 billion in 2011-12 compared to an outflow of Rs. 494.06 billion in 2010-11. The assets under management (AUM) by all mutual funds decreased 0.8% to Rs. 5,872.16 billion at the end of March 2012 from Rs. 5,922.50 billion at the end of March 2011… Read more

SBI MF announces distribution tie-up with Ratnakar Bank

SBI Mutual Fund, one of the leading Fund houses in India, and Ratnakar Bank, today announced that they have entered into an alliance to offer the entire bouquet of SBI Mutual Fund's schemes through the 114 plus branches of Ratnakar Bank spread across Maharashtra, Gujarat, Delhi NCR, Karnataka, Tamil Nadu and Goa… Read more

MF AUM crosses Rs. 7.5 trillion: CRISIL report

The mutual fund industry’s month-end assets under management (AUM) rose by 3% (Rs. 22.2 billion) to Rs. 7.53 trillion in August 2012, according to CRISIL Research report. This was the first time since April 2011 that the industry’s AUM crossed the Rs. 7.5 trillion mark. The rise was primarily due to inflows of Rs. 198 billion into liquid and income funds. However, these inflows were comparatively less vis-à-vis Rs. 385 billion in July 2012… Read more

Reliance Capital forms distribution tie-up with IOB

Reliance Capital Asset Management (RCAM), part of Reliance Capital Ltd, announced a distribution tie-up with Indian Overseas Bank (IOB). According to the agreement, Indian Overseas Bank will be selling Reliance Mutual Fund schemes through its 2,689 branches spread across the country… Read more

ICRA reaffirms ratings to SBI Funds schemes

Credit risk rating of [ICRA]A1+mfs (pronounced ICRAA One plus mfs) has been reaffirmed for the SBI Magnum Instacash Fund, SBI Premier Liquid Fund and SBI Short Horizon Debt Fund - Ultra Short Fund. Schemes with this rating are considered to have very strong degree of safety regarding timely receipt of payments from the investments that they have made. This scale applies to debt funds with weighted average maturity up to one year… Read more

NFOs

JP Morgan launches 5-year close-ended scheme

JPMorgan Asset Management India Private Ltd has launched a five-year close-ended income scheme — JPMorgan India Fixed Maturity Plan - Series 502. The new fund offer opens today (September 14, 2012) and closes on September 28, 2012. The fund’s performance will be benchmarked against CRISIL Composite Bond Fund Index… Read more

SBI Debt Fund Series-90 Days-70 floats on

SBI Mutual Fund has unveiled a new fund named as SBI Debt Fund Series - 90 Days - 70, a close ended debt scheme with the duration of 90 days. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue will be open for subscription from 14 September and closes subscription on 17 September 2012… Read more

SBI Debt Fund Series-366 Days-15 floats on    

SBI Mutual Fund has unveiled a new fund named as SBI Debt Fund Series - 366 Days - 15, a close ended debt scheme with the duration of 366 days. The New Fund Offer (NFO) price for the scheme is Rs. 10 per unit. The new issue will be open for subscription from 18 September and close on 21 September 2012… Read more

Reliance Capital declares special interim dividend

The board of Reliance Capital in its meeting on 10 September 2012 has recommended special interim dividend at the rate of Rs. 5 per equity share of Rs. 10 each (50%).

Birla Sun Life Fixed Term Plan-Series GB to Series GI files offer document with SEBI

Birla Sun Life Mutual Fund has filed offer document with SEBI to launch Birla Sun Life Fixed Term Plan-Series GB to Series GI, a closed end income scheme. The scheme will have duration/tenure of 12 months to 60 months and 7 days from and including the date of allotment. The New Fund Offer price is Rs. 10 per unit… Read more

L&T Mutual Fund announces dividend under FMP VI (June 91D A)

L&T Mutual Fund has announced 18 September 2012 as the record date for declaration of dividend under the dividend payout option of L&T FMP VI (June 91D A). The scheme would mature on 18 September 2012 and accordingly, units shall be suspended from trading on the NSE where the scheme is listed.

Principal Debt Savings Fund-Retail Plan announces changes

Principal Mutual Fund has approved modification to certain features of Principal Debt Savings Fund-Retail Plan, an open ended income scheme, with effect from the business day immediately following 12 October 2012. The modifications are… Read more

ICICI Pru Fixed Maturity Plan-Series 64-3 Years Plan K extends NFO period

ICICI Prudential Mutual Fund has announced extension of new fund offer (NFO) period of ICICI Prudential Fixed Maturity Plan-Series 64-3 Years Plan K. The NFO period of the scheme has been extended till 20 September 2012.

DSP BlackRock FMP-Series 10-12M announces maturity date

DSP BlackRock Mutual Fund has announced the record date for the purpose of determining the eligible unit holders/beneficial owners holding units (in demat form) of DSP BlackRock FMP-Series 10-12M, a closed-ended income scheme, who would be entitled to the maturity/redemption proceeds on the maturity/final redemption date shall be 18 September 2012. The maturity/final redemption date of the scheme is on 20 September 2012.

UTI MF launches Fixed Term Income Fund-Series XII-IX (368 Days)

UTI Mutual Fund has launched a new fund named as UTI - Fixed Term Income Fund - Series XII - IX (368 Days), a close ended income scheme. The duration of the scheme is 368 days from the date of allotment. The new issue will be open for subscription from 13 September and will close on 20 September 2012… Read more

HDFC Mutual Fund launches FMP 373D September 2012 (1)

HDFC Mutual Fund has launched HDFC FMP 373D September 2012 (1), a plan under HDFC Fixed Maturity Plans-Series 22 (a close-ended income scheme). The new issue will be open for subscription from 20 September and will close on 25 September 2012… Read more

Tata MF announces dividend under various schemes

Tata Mutual Fund has announced 18 September 2012 as the record date for declaration of dividend under the dividend options of the following schemes… Read more

ICICI Prudential US Bluechip Equity Fund announces changes

ICICI Prudential Mutual Fund has announced the following changes in ICICI Prudential US Bluechip Equity Fund from 14 September 2012… Read more

In Focus Stories

Banks to demarcate accounts for ASBA facility in public offers: SEBI

On 13th September, SEBI has directed banks to clearly demarcate separate accounts for public offer applications, filed under ASBA (Application Supported by Blocked Amounts) facility under which money remains in the investors' accounts till the time of share allotment.

“Some banks while making applications on own account using ASBA facility are doing so without having clear demarcated funds and that some banks are marking lien against credit limits / overdraft facility of their account holders’ for ASBA applications,” capital market regulator said in a circular… Read more

EPFO sets up E-Passbook facility for EPF members

The EPFO (Employees' Provident Fund Organisation) has set up E-Passbook facility for EPF members so that EPF subscribers can get updated information and easy access. 

Provident Fund (PF) regional commissioner, Abhay Ranjan, in a letter to all regional PF commissioners in India, has said, “A facility of E-Passbook to EPF members has been devised by the IS (Information Systems) Division, Head Office-Delhi, through the member portal on the EPFO website.”… Read more

Investor complaints against AMCs decline

According to the AMFI (Association of Mutual Funds in India) data, there has been a significant decline in the number of complaints lodged by mutual fund investors against asset management companies (AMCs).

The reasons for the decline in investor complaint were attributed to AMCs using better transactional practices, efficient complaint redressal mechanism and strengthening data management capabilities… Read more

New Appointments

Canara Robeco AMC appoints Ravi Gopalakrishnan & Krishna Sanghavi

Canara Robeco Asset Management Company Ltd has appointed Ravi Gopalakrishnan as its head of equities and Krishna Sanghavi as its senior fund manager-equities.

In their new role, Mr Gopalakrishnan & Mr Sanghavi will be responsible for managing the equity funds that form a major part of Canara Robeco's portfolio. These include Canara Robeco Equity Diversified Fund, Canara Robeco Equity Tax Saver Fund, Canara Robeco Balance, Canara Robeco F.O.R.C.E Fund etc.

Religare MF announces change in key personnel

Religare Mutual Fund has announced change in key personnel with effect from 5 September 2012. Mr. Satyakam Gautam has joined Religare Asset Management Company as dealer-fixed income with effect from 5 September 2012. 30 years old Mr Gautam has qualification of B.E. (Mechanical) & PGDM from Lucknow. He has more than 4 years of experience in trading in fixed income securities and private wealth management… Read more

Quote, Unquote

“If the world economy gets better, I own commodities because there’s shortages developing. If it doesn’t they’re (central banks) all going to print money. It’s the wrong thing to do, but it’s all they know to do”

Jim Rogers, International Investor, on CNBC

“Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium”

Late Murray Rothbard, American Economist

“The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register”

Late Hans Sennholz, Economist, Austrian School of Economics

 



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