News this week
SEBI finalises draft norms for Infra Investment Trusts
The Securities and Exchange Board of India (SEBI) has put out draft regulations for so-called infrastructure investment trusts to provide easier financing options to developers of public works. InvITs are proposed to provide a suitable structure for financing/refinancing of infrastructure projects in the country, SEBI said in a notification on Thursday. InVITs shall invest in infrastructure projects, either directly or through SPV. In case of PPP projects, such investments shall only be through SPV. An InvIT which proposes to invest atleast 80% of the value of the assets in the completed and revenue generating Infrastructure assets, shall raise funds only through public issue of units and minimum subscription size and trading lot for such InvIT shall be Rs five lakhs. Rest 20% may be invested in under construction infrastructure projects (subject to maximum of 10%) and other permissible investments... Read more
MFs invest Rs55,000 crore in banking scrips
Mutual fund houses have been consistently investing in banking stocks in the year 2014. Their investments has increased to 21.5% of the total AUM (assets under management) in June from 16.6% in January, according to SEBI (Securities and Exchange Board of India) data. Fund managers exposure to banking scrips increased to Rs. 54,746 crore comprising 21.5% of their total equity AUMs of Rs.2.55 trillion as on 30 June from Rs. 30,339 crore in January. During the period, the BSE Bankex surged over 3% in June this year, while the benchmark Sensex rose 5%. After banking, software is the second most preferred sector with MFs having exposure of Rs26,595 crore, followed by pharmaceuticals (Rs16,834 crore) and finance (Rs13,736 crore).
FMPs, debt funds may become less attractive
The imposition of higher taxes on FMPs (fixed maturity plans) and debt fund investments has made them less attractive. The Budget clearly states that all non-equity mutual funds will suffer higher taxes. The increase in dividend distribution tax also comes as a blow to investors. The budget has made two changes. The tax rate has been raised to 20% and the holding period for the units to be eligible for long-term capital gains to 36 months from 12 months. However, the indexation benefit will still be available to investors. “I propose to increase the rate of tax on longterm capital gains from 10% to 20% on transfer of units of such funds,” finance minister Arun Jaitley said in the budget on 10 July. The Finance Bill has stated that the amendments would be effective from April 1, 2015... Read more
ICICI Pru MF launches Growth Fund-Series 2
ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Growth Fund - Series 2, a three and half year close ended equity fund that aims to provide capital appreciation by investing in a well-diversified portfolio of equity and equity related instruments.
Nimesh Shah, MD & CEO, ICICI Prudential Asset Management Company Ltd said, “The Indian economy is on the cusp of bouncing back from the crunching slowdown of the past few years. Many comprehensive measures have been announced by the new government for getting economic growth back on track. With the economy bound to recover sooner or later, we believe equities make a case for investment as the compounding asset class. At the current market valuations, we recommend investors look at equities with a three to five year horizon.”... Read more
UTI MF launches Capital Protection Oriented Scheme Series IV-1
UTI Mutual Fund (UTI) launches a new closed ended scheme UTI-Capital Protection Oriented Scheme Series IV-1 (1103 days). The New Fund Offer has opened on July 7, 2014 and closes on July 21, 2014. The investment objective of the scheme is to endeavor to protect the capital by investing in high quality fixed income securities as the primary objective and generate capital appreciation by investing in equity and equity related instruments as secondary objective. However there is no assurance that the investment objective of the scheme will be realized and the scheme does not assure or guarantee any returns... Read more
US treasury funds decline $670mn in latest week
Total money market fund assets decreased by $10.22 billion to $2.57 trillion for the week ended Wednesday, July 16, the Investment Company Institute reported on Thursday. Among taxable money market funds, Treasury funds (including agency and repo) decreased by $670 million and prime funds decreased by $8.87 billion. Tax-exempt money market funds decreased by $680 million.
Retail: Assets of retail money market funds decreased by $1.42 billion to $893.46 billion. Among retail funds, Treasury money market fund assets decreased by $250 million to $197.65 billion, prime money market fund assets decreased by $750 million to $509.68 billion, and tax-exempt fund assets decreased by $420 million to $186.13 billion.
Institutional: Assets of institutional money market funds decreased by $8.80 billion to $1.67 trillion. Among institutional funds, Treasury money market fund assets decreased by $420 million to $707.85 billion, prime money market fund assets decreased by $8.12 billion to $892.01 billion, and tax-exempt fund assets decreased by $260 million to $72.00 billion. ICI reports money market fund assets to the Federal Reserve each week.
How to file income-tax returns online
Most of us are so busy in our daily activities that we hardly get time to take care of our finances. We also find it difficult to submit our income-tax returns before the due date. In order to meet the deadline of filing our income-tax return, most of us hire the services of a chartered accountant or tax consultant. However, no one knows your finances and income better than you — so why let anyone else file your tax returns?... Read more