Mutual Funds Newsletter – March 03 to 07, 2014

Investors invested over Rs 1.6 trillion in various mutual fund schemes in the first ten months of the ongoing financial year, according to SEBI data

March 08, 2014 2:25 IST | India Infoline News Service
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MFs pump in Rs. 1.6 trillion in Apr-Jan
Investors invested over Rs 1.6 trillion in various mutual fund schemes in the first ten months of the ongoing financial year, according to SEBI data. At a gross level, mutual funds invested Rs 81.4 trillion during the April-January period of 2013-14, while there were redemptions worth Rs 79.8 trillion. This resulted in a net inflow of Rs. 1.6 trillion. Mutual funds reported net inflow of Rs. 1.6 trillion during the 2013-14 fiscal (April-January) as against over Rs. 760 billion in the preceding fiscal, the data added. In April, mutual funds mobilised around Rs 1.08 trillion in various schemes. The significant level of fund mobilisation has also helped the total asset under management of mutual funds to grow to Rs 9.03 trillion at the end of January this year from Rs 8.25 trillion as on December 31, 2013.

MFs report net inflow of Rs. 83,533 cr in Jan 2014
During January 2014, mutual funds saw a net inflow of Rs. 83,533 crore (of which Rs. 71,270 crore inflow was from private sector mutual funds while public sector mutual funds saw inflow of Rs. 12,263 crore) as compared to an outflow of Rs. 74,578 crore (of which Rs. 62,002 crore outflow was from private sector mutual funds, while public sector mutual funds saw outflow of Rs. 12,575 crore) in December 2013. During the financial year 2013-14 so far, mutual funds net mobilised Rs. 1,59,631 crore as compared to Rs. 1,20,269 crore mobilized in corresponding period of 2012-13. The market value of assets under management stood at Rs. 9,03,225 crore as on January 31, 2014 as compared to Rs. 8,25,840 crore as on December 31, 2013, indicating an increase of 9.4 percent... Read more

MFs offload equities worth Rs. 2,515 cr in Jan 2014
Mutual Funds made net investment of Rs. 42,900 crore in the secondary market in January 2014 compared to net investment of Rs. 51,531 crore in December 2013, according to SEBI bulletin. Mutual funds sold Rs. 2,515 crore in equity in January 2014 compared to Rs. 411 crore sold in December 2013. Mutual Funds invested Rs. 45,415 crore in debt market in January 2014 as against of Rs. 51,942 invested in December 2013. As on January 31, 2014 there were a total of 1,469 schemes under mutual funds of which Income/Debt oriented schemes were 1,022 (69.6 percent), growth/equity oriented schemes were 353 (24 percent), Exchange Traded Funds were 39 schemes (2.7 percent), Balanced schemes were 30 (2.1 percent) and Fund of Funds investing Overseas schemes were 24 (1.7 percent)... Read more

Domestic News

Mutual funds to increase use of online medium: SEBI
Capital market regulator SEBI (Securities and Exchange Board of India) wants mutual funds to increase the use of online medium for sale of investment products. According to SEBI, a greater use of Internet as a distribution channel can help increase the penetration of mutual funds, especially among young investors. Online distribution not only increases customer convenience, but also significantly improves distributor economics, SEBI said in its draft proposal on Long Term Policy for Mutual Funds in India. "This phenomenon brings opportunities for mutual funds to tap this segment of population by offering them an option to invest online using Internet," SEBI added... Read more

Insurers can invest in equity ETFs: IRDA
The Insurance Regulatory and Development Authority (IRDA) on Monday has allowed insurance companies to invest in equity exchange traded funds (ETFs) subject to certain conditions. The objective is to attract investments into equity market in India. Only passively managed schemes of the mutual funds, which are registered with SEBI and governed by SEBI are eligible, the IRDA said in a notification. ETF is a security that tracks an index, a commodity or a basket of assets such as an index fund, but trades like a stock on an exchange... Read more

HDFC MF plans to achieve 20% growth in AUM next fiscal
HDFC Mutual Fund is planning to achieve 20% growth in its assets in the next financial year, according to a media report. The fund house draws around 8.5% of its investors though the banking channel. The fund house said that it has a strong distribution channel to reach out to more investors, the report added. Last month, the fund house said it plans to raise up to Rs1,500 crore for real estate through a newly-formed category — alternative investment funds (AIF).

13 hedge funds receive SEBI approval
Over 13 hedge funds have received the SEBI (Securities and Exchange Bo­ard of India) approval after the regulator allowed hedge fund-like stra­tegies to launch operations in India under alternative investment fund (AIF) Category-III segment, according to a media report. The fund houses which have received SEBI approval include Avendus India, Karvy Capital, Motilal Oswal, Ca­pveda, DSP BlackRock, Ed­elweiss and Ambit Capital, the report added. SBI Pipe Fund is waiting for SEBI approval, the report further said. A hedge fund is a popular product overseas. But, in India it is still at a nascent stage. Hedge funds are similar to mutual funds (MFs) in the sense of being investment vehicles which pool investors’ money. This is then invested as per the funds mandate and returns are distributed among unit holders... Read more

Total assets of PMS rises to 1.5% in Jan
Total assets under management (AUM) of Portfolio Management Services (PMS) industry have increased by 1.5 percent from Rs 7,22,233 crore in December 2013 to Rs. 7,32,970 crore in January 2014, according to the SEBI bulletin. As on January 31, 2014, AUM of discretionary PMS constitute 77.3 percent of the total AUM of PMS followed by advisory PMS (17.5 percent) and non discretionary PMS (5.1 percent). In terms of number of clients, discretionary services category ranks first with total of 43,380 clients, out of 57,952 clients in PMS industry, followed by advisory services with 9,572 clients and non-discretionary category with 5,000 clients.

Govt approves Rs. 1,000 minimum monthly pension under EPF
The Government on Friday has approved the proposal to ensure Rs. 1,000 minimum monthly pension under a scheme of EPFO (Employees’ Provident Fund Organisation), according to a media report. The Finance Ministry has already approved the proposal. Pensioners will get the benefit with effect from April 1, the report added. The move will benefit about 28 lakh pensioners. Last month, Central Board of Trustees (CBT), the apex decision making body of EPFO had met on February 5, and decided to amend the EPS-95 scheme for the purpose... Read more

FM approves 8.75% interest on PF deposit for FY14
The Finance Ministry has approved payment of 8.75 per cent rate of interest on PF (provident fund) deposits in 2013-14 for over five crore subscribers of EPFO (Employees' Provident Fund Organisation), according to a media report. In January, Central Board of Trustees (CBT), EPFO's apex decision making body, had decided to raise interest rate for the current fiscal to 8.75 per cent from 8.5 per cent paid in 2012-13. The CBT, which is headed by Ministry of Labour, sent its decision to the Finance Ministry for approval... Read more


What are secured premium notes?
To meet its long term and short term needs of finance, a company may issue various kinds of securities to raise funds from public. A company may decide to issue securities because it needs start up capital or to repay debts or even to expand. It may also need an infusion of new management ideas and know-how. These can be had by a wider ownership base. When an investor buys securities commonly referred to as shares he is enabling the company to carry on its business using the funds provided with little stress... Read more

International News

US taxable govt funds fall by $13bn in latest week: ICI
Total money market mutual fund assets decreased by $4.08 billion to $2.680 trillion for the week ending Wednesday, March 5, the Investment Company Institute reported on Thursday. Taxable government funds decreased by $13 billion, taxable non-government funds increased by $7.85 billion, and tax-exempt funds increased by $1.07 billion. Assets of retail money market funds increased by $170 million to $916 billion. Taxable government money market fund assets in the retail category decreased by $660 million to $197.54 billion, taxable non-government money market fund assets increased by $330 million to $523.77 billion, and tax-exempt fund assets increased by $500 million to $194.69 billion... Read more

Long-term MF inflows $9bn in latest week: ICI
Total estimated inflows to long-term mutual funds were $9 billion for the week ending Wednesday, February 26, the Investment Company Institute reported on Wednesday. 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 inflows of $4.96 billion for the week, compared to estimated inflows of $5.83 billion in the previous week. Domestic equity funds had estimated inflows of $3.11 billion, while estimated inflows to world equity funds were $1.85 billion... Read more

Asset managers show reliance on packaged research solutions
According to new research from global analytics firm Cerulli Associates, for 93% of the US asset managers, secondary market intelligence is the most frequently used research at their firms. "Secondary research is already compiled and synthesized, usually in a report document from firms such as government agencies, trade organizations, and research firms," states Pamela DeBolt, associate director at Cerulli. The March 2014 issue of The Cerulli Edge - U.S. Asset Management Edition is the Market Research issue, covering research distribution trends, managers' need for more proprietary institutional and retail research, and facilitating research decisions... Read more

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