Mutual Fund Newsletter - December 22 to 26, 2014

The market for offline mutual funds is declining after the entry loads were scrapped from mutual funds.

Dec 26, 2014 11:12 IST India Infoline News Service

Top News
 
Sumitomo Mitsui to acquire 2.77% stake in Reliance Capital
Reliance Capital Ltd has sold a 2.8 per cent stake to Japan's Sumitomo Mitsui Trust Bank for Rs 371 crore.
 
The Board of Directors of the company has approved a proposal to issue and allot 70,00,000 Equity Shares of face value of Rs.10 each at a premium of Rs.530 per share, aggregating to Rs.371 crore to Sumitomo Mitsui Trust Bank, Limited (SMTB) (Preferential Allotment), subject to necessary permissions, sanctions, approvals and applicable SEBI Regulations and other provisions of law and which is subject to approval of the Members of the Company.
 
The Board has also proposed to conduct an Extraordinary General Meeting of the Members of the Company on January 23, 2014 to consider the Preferential Allotment of Equity Shares under Chapter VIII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (“SEBI ICDR Regulations”) and Section 62 and Section 42 of the Companies Act, 2013 and Rules made there under and other applicable provisions of the law.
 
The “Relevant Date” for the Preferential Allotment of Equity Shares in terms of Regulation 71 of the SEBI ICDR Regulations is December 23,, 2014 and accordingly, the floor price in respect of the said Preferential Allotment, based on the pricing formula as prescribed under Regulation 76 of the SEBI ICDR Regulations, has been rounded off at Rs.530 per Equity Share.
 
The share sale will help Reliance Capital to prove it's financially sound enough to run a bank, says report.
 
Domestic News
 
How to buy mutual funds online in India?
The market for offline mutual funds is declining after the entry loads were scrapped from mutual funds. The absence of entry loads made it an unattractive selling instrument for advisers. After all, they were earning nothing by selling mutual funds.
 
The fact that advisers are not willing to sell mutual funds should not stop you from investing in mutual funds. If you don’t have an adviser, invest in mutual funds through online mode.
 
There are three online platforms from where investors can buy mutual funds online in India. They are:
 
AMC websites
The investors can buy mutual funds from the online website of mutual fund companies. There are no charges levied on online services. However, the process to invest online through AMC websites is tedious.
 
The investors have to download the scheme form of mutual fund from the website. Thereafter, they have to complete the form and submit it at the collection centres of the RTAs or the fund offices along with the KYC letter, PAN card photocopy and initial cheque.
 
The investors will get a personal identification number from online website. Once they have PIN and a folio number, they can complete all future transactions online using their bank account. They have to follow the same procedure to invest in other fund house
 
Sebi plans to bring down cost of investing in mutual funds: Reports
SEBI is planning to bring down Cost of investing in mutual funds, according to reports. Report stated that mutual funds in India can spend a maximum 2.5 per cent of the assets under management (AUM). Sebi is examining a new rule to introduce 'tied-agent' model where a distributor would be allowed to sell schemes of only one fund house for the first few years, says report.
 
ICI reports Money Market Fund Assets
Total money market fund assets1 decreased by $13.41 billion to $2.69 trillion for the week ended Wednesday, December 17, the Investment Company Institute reported today. Among taxable money market funds, Treasury funds (including agency and repo) increased by $4.05 billion and prime funds decreased by $21.01 billion. Tax-exempt money market funds increased by $3.55 billion.
 
Retail: Assets of retail money market funds increased by US$2.46bn to US$907.94bn. Among retail funds, Treasury money market fund assets increased by US$490 million to US$199.18bn, prime money market fund assets increased by US$900 million to US$519.24bn, and tax-exempt fund assets increased by US$1.07bn to US$189.52bn.
 
Institutional: Assets of institutional money market funds increased by US$18.10bn to US$1.81 trillion. Among institutional funds, Treasury money market fund assets increased by US$6.27bn to US$798.43bn, prime money market fund assets increased by US$12.05bn to US$935.87bn, and tax-exempt fund assets decreased by US$220 million to US$71.25bn.
 
ICI reports estimated long-term Mutual Fund Flows
Total estimated outflows from long-term mutual funds1 were US$18.31bn for the week ended Wednesday, December 17, the Investment Company Institute reported.
 
Equity funds had estimated outflows of US$6.57bn for the week, compared to estimated outflows of US$3.27bn in the previous week. Domestic equity funds had estimated outflows of US$4.18bn, and estimated outflows to world equity funds were US$2.39bn.
 
Hybrid funds, which can invest in stocks and fixed-income securities, had estimated outflows of US$2.34bn for the week, compared to estimated outflows of US$1.70bn in the previous week.
 
Bond funds had estimated outflows of US$9.40bn, compared to estimated outflows of US$3.29bn during the previous week. Taxable bond funds saw estimated outflows of US$10.35bn, and municipal bond funds had estimated inflows of US$950 million.

Related Story