Mutual Fund Newsletter – March 10 to 14, 2014

India Infoline News Service | Mumbai |

Inflows, coupled with mark-to-market gains, helped income funds’ AUM rise 3.5%, or by Rs 152 bn, to Rs 4.48 trillion in February

Top Stories

MF assets continue to scale new highs: CRISIL
Assets under management (AUM) of the Indian mutual fund industry increased 1.45%, or by Rs 131 bn, in February to a record Rs 9.16 trillion, according to the monthly numbers released by the Association of Mutual Funds in India (AMFI). The spurt was primarily due to inflows into income and equity-oriented funds. On the other hand, liquid funds saw outflows, which eroded higher gains for the industry assets.

Income funds (long-term, short-term and ultra short-term debt funds; and fixed maturity plans or FMPs) logged inflows of Rs 129.6 bn – the highest since May 2013. Inflows, coupled with mark-to-market gains, helped income funds’ AUM rise 3.5%, or by Rs 152 bn, to Rs 4.48 trillion in February. The inflows were primarily into FMPs as investors continued to invest in the closed-end funds, lured by higher interest rates offered currently. One-year commercial papers and certificates of deposit traded at 10.12% and 9.76%, respectively, on February 28, compared with 10% and 9.64% on January 31... Read more

Assets of income funds rise 3.5% to Rs. 4.48 trillion in Feb
Income funds including long-term, short-term and ultra short-term debt funds, logged inflows of Rs 129.6 bn in February – the highest since May 2013, according to the monthly numbers released by the Association of Mutual Funds in India (AMFI).

Inflows, coupled with mark-to-market gains, helped income funds’ AUM rise 3.5%, or by Rs 152 bn, to Rs 4.48 trillion in February. The inflows were primarily into FMPs as investors continued to invest in the closed-end funds, lured by higher interest rates offered currently. One-year commercial papers and certificates of deposit traded at 10.12% and 9.76%, respectively, on February 28, compared with 10% and 9.64% on January 31... Read more

New Appointments

Shashank Khade joins Entrust As director & chief equity advisor
Entrust Family Office Investment Advisors, an advisory firm offering complete investment and value added services to several prestigious high net worth clients, has announced the expansion of its advisory activity across India. As part of the expansion, Entrust is now adding personalized direct equity advisory service for its clients. Mr. Shashank Khade, earlier leading the Portfolio Management Services division at Kotak Mutual Fund has been appointed as the Director and Chief Equity Advisor to head the new division... Read more

Domestic News

MFs sell Rs. 100bn equities on redemption pressure
Mutual funds sold shares worth over Rs. 100 billion during the first 11 months of the current financial year, according to SEBI (Securities and Exchange Board of India) data. Mutual funds offloaded Rs 103.19 billion of shares in the first 11 months of this financial year, while they invested Rs. 4.43 trillion in the debt market during the period.

Mutual funds sold equities in nine of the first 11 months and were net buyers in May and August, the data added.
The biggest outflow in equities during this period was in October, when fund houses redeemed Rs. 40.18 billion.

High networth is essential for penetration of MFs: SEBI
SEBI whole-time member S Raman on Friday said that high networth is essential for better penetration of mutual fund industry as asset management companies need financial strength to support growth.

Speaking at the launch of BSE StAR MF in Mumbai, Raman said that around the world for any financial activity financial strength is essential for any organisation.

According to SEBI, Rs. 10 crore is a very small amount, which has been fixed several years ago. Even if an individual adjusts it with inflation, it will be around Rs 30 crore now... Read more


Goldman Sachs AMC announces Central Public Sector Enterprise ETF NFO
CPSE ETF, an open-ended Index Exchange Traded Scheme New Fund Offer will open on 18th March 2014 for anchor investors and on 19th March 2014 for non-anchor investors. Managed by Goldman Sachs Asset Management (India) Pvt. Ltd., CPSE ETF is an open ended scheme to be listed on the Exchanges in the form of an Exchange Traded Fund, which tracks the central public sector enterprises Index.

CPSE ETF is a unique opportunity for investors to invest in 10 Maharatnas, Navratnas and Miniratnas at a discount of 5% on the “Reference Market Price”1 of the underlying shares of CPSE Index, which will be offered to the CPSE ETF by the Government of India (“GOI”). 6.66% Loyalty Units (One Loyalty Unit will be allocated for every 15 Units held) for eligible Retail Individual Investors2 holding the units continuously from the Allotment Date to the Loyalty Unit Record Date, which will be one year from the NFO allotment date. The non-anchor investors NFO closes on 21st March 2014. Scheme reopens for continuous subscription and redemption on or before 11th April 2014... Read more

Franklin Templeton announces dividend in India Equity Income Fund
Franklin Templeton Investments (India) has announced tax-free dividends in its fund - Templeton India Equity Income Fund (TIEIF). All investors registered in the Dividend Plans as on March 14, 2014 will receive this tax-free dividend.

The record date for the dividend is March 14, 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 March 18, 2014 and unitholders will be allotted additional units for the dividend amount.

Axis MF announces dividend on Equity Fund
Axis Asset Management Company announced a tax-free dividend of Re 1 per unit on a face value of Rs 10 per unit under Axis Equity Fund.

The NAV per unit of Axis Equity Fund as on March 10, 2014 was Rs. 12.75 (Axis Equity Fund - Direct Plan – Dividend) & 12.64 (Axis Equity Fund-Dividend). The record date for the dividend is March 17, 2014. Axis Equity Fund is an open ended growth scheme that was launched on Nov 11, 2014. It is currently being managed by Pankaj Murarka... Read more

BSE launches StAR MF platform for distributors
The Bombay Stock Exchange (BSE) on 6th March has launched a mutual fund transaction platform called BSE StAR MF.

This platform allows independent financial advisers or mutual fund distributors to directly buy and sell fund units on the stock exchange. They can even register systematic investment plans (SIPs) for their clients on this platform.

The platform launched in December 2009 was only open to BSE brokers earlier... Read more

Learning

What is an IPO green shoe option?
Most of us who invest in stocks of a company know what is an IPO (initial public offering). An IPO is the first sale of a stock or share by a company to the public. Companies offering an IPO are sometimes new, young companies, or companies which have been around for many years and have finally decided to go public.

Before investing in an IPO, we go through the offer document of the company to know more about it. A listed company is legally bound to abide by commitments made in the document. Besides providing information about the company's competitive strengths, industry regulation, corporate structure, main objects, subsidiary details, risk factors, etc, the offer document also mentions a technical word called “Green shoe option”... Read more

International News

Variable annuity net new sales will reach $22bn by 2018: Cerulli
According to global analytics firm Cerulli Associates, variable annuity net new sales will reach $22 billion by 2018, a 57% increase from 2012 levels.

"Net new variable annuity sales plummeted in 2012 to just $14 billion," states Donnie Ethier, associate director at Cerulli. "However, as interest rates stabilize, we envision legacy variable annuity providers and new entrants, including nontraditional players, to join the marketplace."... Read more

 

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