Mutual Fund Newsletter – December 23 to 27, 2013

The radio campaign urges individuals primarily between the age group of 25-44 to use the mutual fund route to regular savings on a long term basis.

December 28, 2013 2:07 IST | India Infoline News Service
Top News

AMFI urges Indians to save money through Mutual Funds

With an aim to expand the mutual fund investor base across India, AMFI (Association of Mutual Funds in India) has commenced a multi-city radio campaign.

The campaign will spread across 20 Tier I & II cities apart from Mumbai and Delhi. The radio campaign urges individuals primarily between the age group of 25-44 to use the mutual fund route to regular savings on a long term basis.
The radio commercials will be played at top FM stations in the metros, Tier I and Tier II cities. With an aim to increase retail participation, the radio campaign projects investing in mutual funds as an effective practice. The radio investor awareness program is part of the earlier campaign by AMFI, “Savings Ka Naya Tareeka”.  Besides these campaigns, the Mutual Fund industry has initiated a ‘District Adoption Program’ launched recently; in the first phase 178 cities have been adopted by 32 mutual fund companies. The selection of districts was based on the savings potential seen in the districts.
Speaking on this initiative, Sundeep Sikka, Chairman AMFI and CEO, Reliance Mutual Fund said, “Financial awareness is the core aspect to ensure the upward trend in the economy. Although the mutual fund industry has guaranteed a niche` place in the finance sector, there is still a long way to go for the awareness to take shape among the working class. The radio investor education is a very efficient way to reach out to the masses”.

Domestic News

HDFC MF acquires Morgan Stanley schemes in India

HDFC Mutual Fund has acquired its smaller rival Morgan Stanley Mutual Fund in India running a total of eight schemes.

The agreement is subject to regulatory approvals as required.

The average combined assets under management of the eight schemes for quarter ended September 30, 2013 was Rs. 3290 crores.

Mr. Milind Barve, Managing Director of HDFC Asset Management Company Limited said, “HDFC Mutual Fund has acquired a portfolio of strong performing domestic mutual fund schemes from Morgan Stanley and this acquisition is another step towards expanding our mutual fund customer base. We look forward to welcoming the investors in the eight schemes of Morgan Stanley Mutual Fund into the HDFC family.” .

ICI reports long term MF flows

Total estimated outflows from long-term mutual funds were $7.00 billion for the week ended Wednesday, December 11, 2013, the Investment Company Institute reported today. Flow estimates are derived from data collected covering more than 95 percent of industry assets and are adjusted to represent industry totals.
Equity funds had estimated outflows of $1.09 billion for the week, compared to estimated inflows of $1.94 billion in the previous week. Domestic equity funds had estimated outflows of $5.68 billion, while estimated inflows to world equity funds were $4.59 billion.
Hybrid funds, which can invest in stocks and fixed-income securities, had estimated inflows of $877 million for the week, compared to estimated inflows of $895 million in the previous week.
Bond funds had estimated outflows of $6.78 billion, compared to estimated outflows of $3.60 billion during the previous week. Taxable bond funds saw estimated outflows of $4.21 billion, while municipal bond funds had estimated outflows of $2.58 billion.

Birla Sun Life Asset Management partners Anna University

As part of its efforts towards the widespread promotion of Mutual Funds as a concept, Birla Sun Life Asset Management Company Limited (BSL AMC), a part of Aditya Birla Financial Services (ABFS), and Investment Manager for Birla Sun Life Mutual Fund, has entered into a strategic partnership with Anna University, the largest Technical University with 637 affiliated engineering colleges and rated the best State University in the country. The MoU signed by Mr. A. Balasubramanian, CEO Birla Sun Life Asset Management Company Limited and Dr. M. Rajaram, Vice Chancellor, Anna University in Chennai today, allows for a Knowledge Transfer Programme for the students and faculty of all colleges under Anna University.
Nearly fifty years old, the Indian Mutual Fund industry is fraught with a number of challenges. The penetration of mutual funds in India[1] (as measured by the AUM/GDP ratio) remains low at 4.7 percent as compared to 77.0 percent in the US, 41.1 percent in Europe and 33.6 percent in the UK. Greatly under-penetrated, the industry comprising over 40 mutual fund companies today collectively manages 2.5% of Indian household savings[2]. The right kind of awareness among investors about mutual funds, the diversity and benefits of its offerings remains a challenge. Being an advisory product which is largely distribution driven, stagnation in growth of distributor base also acts as a limiting factor.

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