Mutual Fund Newsletter – January 13 to 17, 2014

India Infoline News Service | Mumbai |

After constantly selling for six months, foreign institutional investors have become net buyers in the debt segment in December.

Top Stories

IRDA may allow insurers to invest in equity ETFs

The Insurance Regulatory and Development Authority (IRDA) on Wednesday released a draft on allowing insurers to invest in Equity Exchange Traded Fund (ETF). The regulator has proposed that Equity ETFs would be restricted to schemes of Mutual Funds.

The IRDA will allow insurance companies to invest in equity ETFs.

The equity ETFs would be restricted to registered schemes of Mutual Funds (MFs) and over all expense ratio should be below 0.4% of daily net assets, RK Nair, Member (Investment), IRDA said in circular issued on Thursday.

Equity ETFs should not be holding more than 15% of Fund in a single company and total exposure to a particular sector should not exceed 30% of the fund. No investments in the overseas equity ETFs... Read more

Govt to launch CPSE-ETFs in a month

The Government is actively considering launching an ETF (exchange trade fund) consisting of 11 Central Public Sector Enterprises within a month, according to a media report.

The Government wants to raise about Rs. 30 billion through the CPSE-ETFs, the report added.

In May 2013, the Cabinet Committee on Economic Affairs had approved the setting up of a CPSE-ETF, which would comprise CPSE stocks (from amongst the listed CPSE stocks). Each stock would have a fixed weightage in the basket.

CPSE ETF is made up of a basket of shares of different CPSEs, that tracks an index fund, but trades like a stock on the exchange... Read more

Special Stories

SEBI tightens rules for issue of participatory notes

Capital market regulator SEBI (Securities and Exchange Board of India) has tightened the norms for issue of participatory notes (P-notes).

The regulator has barred "unregulated" foreign funds from dealing in offshore derivative instruments even though their investment managers are appropriately regulated by their concerned regulators.

Participatory notes also called P-Notes are offshore derivative instruments with Indian shares as underlying assets. These instruments are used for making investments in the stock markets... Read more

FIIs buy debt funds worth $857.8mn in December

After constantly selling for six months, foreign institutional investors have become net buyers in the debt segment in December.

FIIs offloaded debt funds worth $13.3 billion from June to November 2013. The selling paused in December 2013 with FIIs net buying $857.8 million of debt. The outflow in the six months from June to November was $13.3 billion.

The month of January has reported net inflows of $572 million so far.

EPFO to provide 8.75% interest on PF deposits for FY14

In mid-January, retirement fund body EPFO (Employees' Provident Fund Organisation) said that it has decided to increase the rate of interest on provident fund deposits to 8.75% for 2013-14.

The decision is expected to benefit 50 million subscribers. According to Union surface transport and labour minister Oscar Fernandes, EPFO has decided to recommend to the government 8.75% rate of interest for 2013-14 to its subscribers.

The Central Board of Trustees, which is the apex decision-making body of the EPFO, has approved the 8.75% interest rate. The EPFO's recommendation will be vetted by the finance ministry. Once the ministry approves the decision, the interest would be credited to the accounts of subscribers.

New Appointments

SEBI chairman set to get two more years' extension

The Securities and Exchange Board of India (SEBI) Chairman UK Sinha is set to get two years’ extension when his three-year term ends in February, according to a media report.

Sinha was first appointed as SEBI Chairman in February 2008. He was the Chairman and Managing Director (CMD) of the Unit Trust of India Asset Management Company (UTIAMC), commonly referred to as UTI Mutual Fund. He is a member of the Indian Administrative Services (IAS), belonging to the Bihar Cadre... Read more

Domestic News

ICICI Pru AMC launches Prudential Equity Savings Fund-Series

ICICI Prudential Asset Management Company has announced the launch of ICICI Prudential Equity Savings Fund, a close ended equity fund that focuses on investing in equity securities of companies which are likely to see expansion in Return on Equity over the next 3 years.
The fund aims at adopting a focused approach on select high conviction stocks which are likely to gain from factors such as the improving economy, a favorable regulatory change, change in the industry dynamics or company specific factors.
 
The portfolio will be managed by Mr. Manish Gunwani, Sr. Fund Manager and Mr. Venkatesh Sanjeevi, Fund Manager, ICICI Prudential Asset Management Company...
Read more

Religare Invesco MF unveils Invesco Pan European Equity Fund

Religare Invesco Mutual Fund has launched its new fund ‘Religare Invesco Pan European Equity Fund (an open-ended fund of funds scheme). The Fund seeks to generate capital appreciation by investing into Invesco Pan European Equity Fund (Underlying Fund); a Luxembourg domiciled fund, which invests primarily in equity securities of European companies with an emphasis on larger companies. The Underlying Fund launched in 1991 with assets under management of EUR 2.23bn1 (USD 3.03bn, INR 18,922 crores) has a long established track record and follows an active, valuation led bottom up investment approach to select stocks. The New Fund Offer of Religare Invesco Pan European Equity Fund will close for subscription on Jan 29, 2014... Read more

DSP BlackRock MF launches Dynamic Asset Allocation Fund

DSP BlackRock Investment Managers Pvt. Ltd, one of the premier asset management companies in India, has launched DSP BlackRock Dynamic Asset Allocation Fund (DAAF).

This first-of-its-kind open ended fund of funds scheme will dynamically manage the asset allocation between the specified equity mutual funds schemes and debt mutual funds schemes of DSP BlackRock Mutual Fund, based on the relative valuation of equity and debt markets. The key value proposition of the scheme is to provide an asset allocation overlay to investors. The scheme will invest in specified underlying schemes of DSP BlackRock Mutual Fund which have a long-term performance track record... Read more

Franklin Templeton announces dividend in India Dynamic Pe Ratio Fund of Funds

Franklin Templeton Investments (India) has announced dividend in FT India Dynamic PE Ratio Fund of Funds (FTDPEF). All investors registered in the Dividend Plan/Option as on January 17, 2014 will receive this dividend.

The record date for the dividend is January 17, 2014 and any purchases on or before this date will be eligible for the dividend. Under the dividend reinvestment plan, the dividend declared will be reinvested in the Fund at the NAV of January 20, 2014 and unitholders will be allotted additional units for the dividend amount.

Learning

Section 80G: Deduction to certain fund, charitable institutions

To encourage people to donate, the Indian government allows for income tax deductions under Section 80G for the amount which has been donated. The amount donated by a person is allowed to be claimed as a deduction under Section 80G, at the time of filing his income tax return.

This deduction for donation can be claimed by any taxpayer (whether individual, partnership firm, HUF, company etc) irrespective of whether he is earning income from his salary or business. The deduction available under Section 80G is over and above the deduction of Rs. 1 lakh allowed under Section 80C. Let's try to know more about deduction under Section 80G... Read more

International News

ICI reports estimated long-term mutual fund flows

Total estimated inflows to long-term mutual funds were $2.88 billion for the eight-day period ending Wednesday, January 8, the Investment Company Institute reported. 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 $647 million for the week, compared to estimated inflows of $6.20 billion in the previous week. Domestic equity funds had estimated outflows of $3.36 billion, while estimated inflows to world equity funds were $2.72 billion... Read more

Asian managers outperformed global peers as hedge funds up 8% in 2013

Hedge funds delivered their fourth consecutive month of positive returns as global markets ended the year on a strong note of optimism. The Eurekahedge Hedge Fund Index was up 0.99% during the month. The MSCI World Index gained 1.67% in the month of December.

Key takeaways for the month of December 2013 included: Total assets in the hedge fund industry rose to US$2.01 trillion, the highest level on record since June 2008 when global AUM peaked at US$1.95 trillion. Net asset flows for 2013 stood at US$146.1 billion, with net allocations to North American managers standing at US$73.6 billion year-to-date... Read more
 

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