Mutual Fund industry -- The year that was, and moving on
AuM data for the initial three quarters of 2013 suggests that the year has been sluggish for the mutual fund industry. In fact, notably, during the year, no new licenses were issued, there were no M&A activities and no fresh foreign investment flowed into the sector.
The SEBI had, in the past, taken steps to re-energise the mutual fund industry with continued focus on investor protection. These steps have contributed a sense of stability to the mutual industry, which has been operating in a challenging environment. Going forward, the SEBI could adopt a more stricter approach towards 'non-serious' asset managers. An advisory committee formed to review the net worth requirement for AMCs has suggested an upward revision in the minimum net-worth required for an AMC.
Debt schemes continue to be the flavour of the season. The first Infrastructure Debt Mutual Fund scheme (mutual fund – IDF) was launched in the year 2013. Further, while mutual fund AMCs have shown interest in tapping the pension products market, in the absence of adequate tax incentives, this is yet to take-off. From an asset management industry perspective, the proposal to launch REITs could provide an alternative investment avenue to investors.
While the Government has pro-actively amended the law to resolve taxation issues for mutual fund industry on investment in securitisation trusts, the industry remains circumspect and the amendments have failed to attract investments by mutual funds in securitisation trusts. The industry continues to litigate past tax issues on securitisation trusts.
In a sense, the performance of the mutual fund industry has, to an extent, mirrored the performance of the Indian economy, the stock markets and the FII investment (or divestment) story. With elections on the anvil, an element of 'uncertainty' could prevail for the next quarter or so.
Moving on, the industry looks forward to quick and clear directions on safe harbour for management of offshore funds from India and other similar measures whereby tax can be a facilitator for growth.
Gautam Mehra, leader - Asset Management, PwC India
DSP BlackRock MF launches investor service initiative – OTM
DSP BlackRock Investment Managers Pvt. Ltd announced the launch of its investor service initiative, One Time Mandate (OTM).
OTM is a onetime registration process that enables investors to transact with DSP BlackRock Mutual Fund in a simple, convenient and paperless manner in the future.
With OTM, investors can authorise their bank to debit their account up to a certain specified limit per day, as and when they transact with DSP BlackRock Mutual Fund without the need to sign a cheque or transfer funds online.
DSP BlackRock Investment Managers Pvt. Ltd. is the first asset management company in the country to introduce this service that would help its investors to make fresh investments in any of its mutual fund schemes including NFOs, start new SIPs, redeem investments, and also switch investments to other schemes.
UTI Mutual Fund declares dividend under UTI-CRTS
UTI Unit Scheme for Charitable and Religious Trusts and Registered Societies (UTI-CRTS) declares a dividend resulting in gross pay out of 6% (Rs.6 per unit on a face value of Rs. 100/-).
This pay out includes the applicable dividend distribution tax.The record date for the dividend is December 18, 2013.
Pursuant to the payment of dividend, the NAVs of the dividend option- existing plan and dividend option-direct plan of the scheme would fall to the extent of payout and statutory levy if any.
Considering the dividend distribution tax, the payout translates into a dividend of 4.48% (Rs.4.48 per unit on a face value of Rs. 100/-) for the UTI-CRTS investors.
The NAV of UTI CRTS on December 12, 2013 under dividend option-existing plan was Rs. 137.7330 and under dividend option-direct plan was Rs. 138.0881.
Kotak Mutual Fund Announces Dividend Under Its Schemes
Kotak Mutual Fund has announced 20 December 2013 as the record date for declaration of dividend under the following schemes. The quantum of dividend (Rs per unit) on the face value of Rs 10 per unit will be:
IL&FS Infra Asset Management raises Rs.7.50 bn for Infra Debt Fund
- Kotak Flexi Debt Scheme - Regular Plan: 0.2455
- Kotak Monthly Income Plan: 0.1019
- Kotak Monthly Income Plan - Direct Plan: 0.1164
- Kotak Multi Asset Allocation Fund: 0.0870
- Kotak Multi Asset Allocation Fund - Direct Plan: 0.1001
- Kotak Gilt Investment - Regular Plan : 0.4269
- Kotak Gilt Investment - Direct Plan : 0.4641
- Kotak Bond Deposit Plan: 0.3513
- Kotak Income Opportunities Fund: 0.2480
IL&FS Infra Asset Management Limited (IIAML), an Asset Management Company promoted by IL&FS Financial Services Limited (IFIN) to manage the IL&FS Infrastructure Debt Fund (IIDF), has raised ? 7.50 billion for the fund’s first set of close ended schemes, IIDF – Series 1A, 1B and 1C having maturities of 5, 7 and 10 years, respectively.
With this closure, the fund has earned the distinction of being the first IDF in the country to successfully raise funds from investors.
Speaking on the occasion, Ravi Parthasarathy, Chairman-IL&FS Group said, “IL&FS IDF would be an integral part of the IL&FS Group’s efforts of contributing to the development of Infrastructure sector in India.” Further, Mr Ramesh Bawa, Managing Director and CEO, IFIN expressed , “Our initial fund raise is just the beginning – we eventually intend to scale up the asset under management to USD 5.0 billion through launch of various other schemes targeting fund raising from domestic and offshore long term investors.”