Mutual Fund Newsletter - October 14 to 18, 2013

India Infoline News Service | Mumbai |

In the same period, 44 AMCs' assets under management increased to Rs. 8.66 trillion from Rs. 7.66 trillion in August.

Top Stories

Equity MF folio numbers decline 2% to 24.3mn in September

The total number of folios issued by asset management companies (AMCs) decreased slightly to 41.3 million in September from 41.5 million in August, according to SEBI (Securities and Exchange Board of India) data.

In the same period, 44 AMCs' assets under management increased to Rs. 8.66 trillion from Rs. 7.66 trillion in August.

Equity funds reported the maximum decline in folio numbers followed by gold exchange traded funds (ETF) in September, the SEBI data added... Read more

SEBI appoints 5 entities as investment advisers

Market regulator SEBI (Securities and Exchange Board of India) on Monday has allowed five entities to act as investment advisers.

The investment advisers include Edelweiss Investment, Principal Retirement, Aroha Capital and two individuals.

SEBI had granted registration to 11 entities in August 2013, including ICICI Securities, IFMR Investment Adviser Services, Sensage Financial Services and Valuefy Solutions.

Special Stories

SEBI panel for securities transaction tax cut on options

A study by Development Research Group (DRG) under the Securities and Exchange Board of India has suggested the reduction of Securities Transaction Tax on options trading for the purpose of protecting losses.

The study found that spot-market has been dominating the futures and option markets and that the dominance of futures market over options has diminished after the increase in STT. The Study proposed that the STT on protective-put and hedged-call positions should be reduced to give boost to the option market.

The objective of the study is to examine whether the introduction of financial derivatives led to better price-discovery (PD) in India. Using synchronous daily spot, futures, and option price on Nifty and ten randomly selected stocks, it has been found that, while the spot-market is increasing its dominance over futures and options, the futures market’s dominance over option-market has drastically fallen following the increase in STT.

Further, this study is the first one to analyze individual stock-options in India. While the derivatives and spot markets exhibit a long-term relation, the present study found the existence of long-term relationship between futures and options on individual stocks, something none had hitherto studied.


SEBI proposes norms for settlement of default proceedings

Market regulator SEBI (Securities and Exchange Board of India) on Monday issued a consultation paper on draft SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2013.

SEBI has proposed new rules for settlement of administrative and civil proceedings against suspected market defaulters, excluding cases of serious violations such as insider trading and fraudulent and unfair trades.

No application will be considered if it is made after 60 days from the date of service of showcause notice issued by SEBI... Read more

Domestic News

ARN fee waiver extended till March 2014: AMFI
AMFI (Association of Mutual Funds in India) has extended the ARN fee waiver period till March 2014. ARN licenses are valid up to three years.

In order to expand the distributors network, AMFI had started issuing ARN free of cost to individuals and new cadre of distributors from February 2013. This is the second time AMFI has extended the fee waiver period.

New cadre of distributors include intermediaries engaged in distribution of financial products e.g. insurance agent, FD agent, national savings scheme products, PPF, etc. registered with any other financial services regulator and business correspondents appointed by banks... Read more

BSE allows MF distributors to use StAR Mutual Fund Platform

The Bombay Stock Exchange (BSE) on Tuesday allowed mutual fund distributors to use its infrastructure for purchase and redemption of mutual fund units directly from Assets Management Companies (AMCs) on behalf of their clients following a SEBI directive.

SEBI in its circular issued on 4 October 2013 allowed mutual fund distributors to use recognised stock exchanges' infrastructure to purchase and redeem mutual fund units directly from Mutual Fund / Assets Management Companies on behalf of their clients... Read more

BNP Paribas Dual Advantage Fund-Series I floats on
BNP Paribas Mutual Fund has launched a new fund named as BNP Paribas Dual Advantage Fund-Series I, a close ended income scheme. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue opens for subscription from 17 October to 1 November 2013.

The investment objective of the scheme is to seek to generate income by investing in a portfolio of debt and money market securities maturing on or before the maturity of the scheme and capital appreciation by investing in premium of exchange traded options and/or equity instruments... Read more

ICICI Pru AMC launches Value Fund-Series 1

ICICI Prudential Asset Management Company has announced the launch of ICICI Prudential Value Fund Series Fund 1, a close ended equity fund that focuses on investing in stocks that trade at a discount to their true value.

The fund aims at adopting the ‘value investing’ approach where low priced stocks with justifiable higher fundamentals are identified and invested in with the aim of long-term capital appreciation... Read more

Learning

What is a promissory note?
A promissory note means a signed document containing a written promise to pay a stated sum to a specified person at a specified date or on demand... Read more

International News

70% of managers plan region-specific marketing campaigns

The majority of European, Asian and US managers prefer to plan global marketing campaigns at regional level-but execute the initiative locally.

Cerulli's Global Marketing and Sales Organizations: An Industry Roadmap report finds that many global fund managers have overhauled their internal organization since the global financial crisis. They seek greater control over all aspects of their business, from sales strategies and marketing expenditure, to having a single brand message.
 
Brand recognition is central to investors' decisions, as is investment education, which involves several departments-sales, marketing, product specialists, and fund managers. Thought leadership has therefore assumed an important role in the industry. About 50% of international managers plan to increase their marketing budgets for it next year... Read more

Average wealth above $50K; sets all-time high: Credit Suisse

Global wealth has reached a new all-time high of USD 241 trillion, up 4.9% since last year and 68% since 2003, with the USA accounting for 72% of the latest increase. Average wealth per adult reached a new alltime high of USD 51,600, with wealth per adult in Switzerland returning to above USD 500,000, Credit Suisse Research said.

We expect global wealth to rise by nearly 40% over the next five years, reaching USD 334 trillion by 2018. Emerging markets are responsible for 29% of that growth. China will account for nearly 50% of the increase in emerging economies’ wealth. Wealth growth will primarily be driven by growth in the middle segment, but the number of millionaires will also rise markedly over the next five years, the research company said... Read more

Specialist advisors manage double average assets per advisor

New research from Cerulli Associates, a Boston-based global analytics firm, states specialist advisor practices manage nearly double the industry average assets per advisor. Specialist advisors accounted for 29% of overall advisor assets as of the end of June 2013.

"The vast majority of financial advisors are generalists," states Bing Waldert, director at Cerulli. "We estimate that only 15% of advisors tailor their business to a unique clientele, such as institutions, retirement plans, or high-net-worth investors."... Read more

 

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