Mutual Funds Newsletter - February 02 to 06, 2015

India Infoline News Service | Mumbai | February 06, 2015 12:52 IST

Mutual funds invested a net amount of Rs 33,572 crore in the debt markets in January, according to the data released by SEBI (Securities and Exchange Board of India

News this week
MFs pump in funds worth Rs. 270 cr in equities in Dec
Mutual funds invested a net amount of Rs 33,572 crore in the debt markets in January, according to the data released by SEBI (Securities and Exchange Board of India). The huge inflow of funds had helped the mutual funds assets under management (AUM) cross Rs.11 trillion in December. The fund houses invested funds worth Rs. 270 crore in the equity markets in December 2014. Mutual funds invested a net amount of Rs 6.2 trillion in 2014 higher than Rs. 4.85 trillion invested in the prior year. Mutual fund is an investment vehicle with a pool of funds collected from investors to buy securities such as stocks, bonds, money market instruments and similar assets.
MF assets rise to Rs. 11.34 trillion in Dec: AMFI
Assets managed by the Indian mutual fund industry has increased to Rs.11.34 trillion in December 2014 from Rs.9.02 trillion in March 2014, according to AMFI data. (Assets are measured as average assets for the month.)
This is an absolute growth of 25.7% in assets from the start of this financial year. The share of equity oriented schemes in mutual fund assets has been growing since March 2014, increasing from 22% to 30% in December 2014. The proportionate share of debt-oriented schemes has fallen from 52% to 45% during the same period.
Individual investors account for about 46% of mutual fund assets, of which high net worth investors (HNIs) as a category account for about 26%. Institutional investors account for 54% of the mutual fund assets, of which corporates are the larger chunk at about 47%. The rest are Indian and foreign institutions. Institutional investors dominate liquid and money market schemes (92%) and debt-oriented schemes (60%).
Equity-oriented schemes derive almost 86% assets from individual investors (Retail + HNI).
Institutions include domestic and foreign institutions and banks. HNIs are investors who invest with a ticket size of Rs. 5 lakhs or above. Equity-oriented schemes include equity and balance funds.
MF folios stand at 4 crore in Dec: AMFI
There are 4,02,76,980 accounts in the mutual fund industry as at December 2014, of which 99% is accounted for by individual investors, according to AMFI data. There were 38,621,017 retail investor accounts, 1,322,099 folios of of HNI accounts and 333,864 folios of institutional investors accounts. Account refers to a folio. An investor may have multiple accounts in a single fund or across funds. This is therefore not a count of number of investors, but number of accounts.
Share of T15 locations in MF assets stand at 84% in Dec
The share of T15 locations in the assets of the mutual fund industry, dropped from 84.4% in March 2014 to 83.7% in December 2014, according to the data released by AMFI. Over 16.3% of the assets of the mutual fund industry came from B15 locations in December 2014. Assets from B15 locations grew from Rs.1.41 trillion in March 2014 to Rs. 1.85 trillion in December 2014, the data added.
The growth rate for the mutual fund industry was 26% during this period, while growth rate in assets for B15 locations was 31.18%. The B15 locations have a better balance of equity and non-equity assets. The T15 locations are skewed in favour of non-equity assets due to the concentration of institutional investors. There was a shift away from non-equity schemes to equity schemes since March 2014. This was more marked in T15 locations.
Of all the individual assets managed by the industry, 23% comes from the B15 locations. About 11% of institutional assets come from B15 locations. The shares of B15 assets has increased for both categories since March 2014. Over 36% of the assets of the mutual fund industry came directly. A large proportion of direct investments were in non-equity oriented schemes where institutional investors dominate. About 11% of the retail investors chose to invest directly, while 14% of HNI assets were invested directly. The proportion of direct investments in equity, to the total assets held by individual investors, is 4.8% in December 2014. Equity-oriented schemes include equity and balance funds. Institutions include domestic and foreign institutions and banks. HNIs are investors who invest with a ticket size of Rs. 5 lakh or above.
Individual investors investment in MFs rise 32% in Dec: AMFI
Individual investors increased their investment in mutual funds from Rs.3.99 trillion in March 2014 to Rs.5.25 trillion in December 2014, an increase of 31.68%, according to the AMFI data. Individual investors contributed 44.19% of the assets in March 2014. This increased to 46.28% by December 2014. Institutional assets grew from Rs.5.04 trillion in March 2014 to Rs.6.09 trillion in December 2014.
Over 55% of individual investor assets are held in equity oriented schemes in December 2014. Over 90% of institutions assets are held in liquid / money market schemes and debt oriented schemes in December 2014. Institutions include domestic and foreign institutions and banks. HNIs as defined as individuals investing Rs 5 lakhs and above. Equity-oriented schemes include equity and balance funds. Individual investors primarily hold equity oriented schemes; while institutions hold liquid and debt oriented schemes. Institutions include domestic and foreign institutions and banks. HNIs are investors who invest with a ticket size of Rs. 5 lakhs or above. Equity-oriented schemes include equity and balance funds.
MFs not to make big claims: SEBI
Capital market regulator SEBI (Securities and Exchange Board of India) has alerted mutual funds not to promote their schemes by making big claims. The SEBI has directed fund houses to avoid using ads claims that their schemes had outperformed the index by an exaggerated number, SEBI said in a circular to the mutual funds. According to SEBI, as mutual funds themselves point out, unless a common format to calculate the NAV is introduced, all such claims could be misleading.
AMFI launches all-in-one portal
MF Utilities India Pvt Ltd (MFUI) has launched a portal (MF Utility India) that will allow investors to buy schemes of fund houses using a single application and paying money through a single payment. The portal was launched on 21 January 2015. Investors have to open a common account number (CAN) which will function as the unique ID number for all MF investments. Transaction facility would be open from March 4, 2015.
Distributors would also benefit from 24*7 transaction submissions sitting in their office, single point for submission of documents, consolidated view of client investments across fund houses and single point information on all schemes. Value-adds such as alerts, triggers and reminders would enable investors to manage investments.
SEBI amends foreign portfolio investors norms for govt bonds
In order to attract funds from overseas investors, SEBI on Thursday allowed Foreign Portfolio Investors to invest their coupons received on investments in government securities back into such bonds. Investment of coupons in Government securities will be enabled even when the existing limits for FPIs are fully utilised, SEBI said in a circular on Thursday.
Accordingly, FPIs shall be permitted to invest in Government securities, the coupons received on their investments in Government securities. Such investments shall be kept outside the applicable limit (currently $30 billion) for investments by FPIs in Government securities. For the purpose of investment of coupons, the FPIs shall have an investment period of 5 working days from the date of receipt of the coupon. A re-investment facility of 5 working days shall be provided on the Government securities that have been purchased by utilizing the coupons.
All other existing conditions for investment by FPIs in the Government securities market remain unchanged for this additional facility as well. It is further clarified that coupons received on these Government securities purchased by investment of coupons shall also have the same facility. The coupons invested in purchasing Government securities shall be classified into a separate investment category which is over and above the $30 billion Government debt limit. The depositories shall put in place the necessary systems for the daily reporting by the custodians of the FPIs and shall also disseminate this coupon investment data along with the daily debt utilization data.
Mutual funds: How to track your investments
Most of us know that mutual fund investments are in a non-physical format. When we want to redeem mutual funds, only the folio number is required and not the original investment paper or the account statement. A mutual fund account statement carries the investor details, holding pattern, address, bank account details registered with the fund and the folio number assigned to the investment.
Investors who have updated PAN details with their mutual funds, receive a consolidated account statement (CAS) at the end of every half year. The consolidated statement shows a record of all mutual fund holdings in their names across various companies. The investor can directly approach the AMC or its registrar. A letter requesting for account statement and mentioning personal details such as name & address and PAN have to be provided. The letter should also mention investment details such as investment date, amount invested and bank details can be submitted to the AMC office or investor service centre of the registrar. On the basis of the information, the AMC will track the investment and send the statement.


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