Saturday, April 30, 2011

SEBI begins work on infra debt funds for MFs: Sources

The Securities and Exchange Board of India (SEBI) is doing its bit to boost infrastructure funding in the country. The market regulator is working on a proposal for an infrastructure debt fund, specifically for mutual fund, reports CNBC-TV18's Vidhi Godiawala quoting sources.

Taking a cue from their budget announcements and looking at boosting infra financing in the country, the sources said that SEBI is exploring options to come out with an infra debt fund for mutual fund houses. This proposed mutual fund infra debt fund is still in its conceptualization phases.

The budget 2011 allowed FIIs to invest up to USD 25 billion in corporate infra bonds. Sources also said that the proposed fund will be a separate category of a mutual fund, where SEBI is in talks with the finance ministry and mutual fund houses in terms of the final structure and modelling of this proposed infra debt fund.

FIIs will be investing their money into this proposed mutual fund infra debt fund. In turn, the fund houses will invest FIIs money into the various infrastructure projects across the country.

However, the paper or security proposed fund would have a minimum residual period of maturity of five years at the time of investment.

The budget had also promised that FII investments into infra funds will be exempt from the 20% withholding tax. Sources informed that the regulator and fund houses are looking at clarity on the taxation of this proposed infra debt fund.

They are seeking an exemption of that 20% of the withholding tax, so that it would make it more lucrative for the FIIs to come in and pout the money into this proposed infra debt funds, which will be floated by the mutual fund houses.

In the mean time, mutual funds are receiving feedback from the various FIIs. They are trying to see whether there is an appetite for the fund. They will need finance ministry approval for the same.

However, the initial feedback from the finance ministry has been positive on this front.

Source: http://www.moneycontrol.com/news/mf-news/sebi-begins-workinfra-debt-funds-for-mfs-sources-_538788.html


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MFs cut stake in most BSE-500 firms

Mutual funds scaled down their exposure in more than half of the BSE-500 companies in the quarter ended March on a sequential basis. The index comprises largecap as well as midcap stocks.

Data compiled by the Business Standard Research Bureau shows of the 385 companies which had announced their latest shareholding, fund houses cut their stake in about 200.

The companies where MFs pared stake include Kingfisher Airlines, HCC, Voltas, Hindalco, Patni Computers, Axis Bank, Larsen & Toubro, Tata Motors and Mahindra & Mahindra, among others.

Fund managers say the quarter was marked with dividend payouts and had seen churning and stock picking within sectors. For instance, fund houses brought down stake in automobile companies Tata Motors and TVS Motors, but increased the exposure in other sectoral companies such as Maruti Suzuki and Bajaj Auto. This also held true in banks & financials, information technology and metals.

Gopal Agrawal, equity head at Mirae Assets, says, "On an aggregate basis, the reduction (of stake) is very low. The quarter saw redemption as well as Initial Public Offerings, for which MFs generated cash."

Jimmy Patel, chief executive officer at Quantum Mutual Fund, agrees.

"Several fund houses declared dividends. Moreover, there was profit booking amid redemption pressure," he adds. For 2010-11, domestic funds saw a net outflow of Rs 49,406 crore, compared with a net inflow of Rs 83,081 crore. The equity category witnessed a historically high outflow of Rs 13,405 crore, while income funds saw an outgo of Rs 36,706 crore in 2010-11. Diversified equity funds have reduced exposure to mid-cap stocks over recent months, explains Dhruva Chatterji, research analyst at MF tracker Morningstar India.

By Morningstar's statistics, the average percentage of capital allocation for diversified equity funds in mid-cap stocks slipped to 20.5 per cent in March against 21.27 per cent in December. In the case of small caps, the exposure reduced to 14.15 per cent, compared with 14.82 per cent. During the quarter, MFs increased their stakes in 145 of the BSE-500 companies, which included Zuari Industries, Cox & Kings, YES Bank, HPCL, BPCL, Tata Steel, Infosys and Bajaj Auto.

Source: http://www.business-standard.com/india/news/mfs-cut-stake-in-most-bse-500-firms/433741/



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Close-ended mutual fund schemes see a sharp rise

With a fourfold increase in new launches, FMPs emerge the favourite.

Amid volatility in equity markets and consistent redemption, the number of close-ended schemes in the mutual fund industry saw a sharp rise in the last financial year, courtesy fixed maturity plans (FMPs). Fund houses registered a four-fold rise in the number of FMPs in 2010-11.

According to data from the Association of Mutual Funds in India (Amfi), the number of close-ended schemes reached 368, as against 202 last year, a jump of over 82 per cent. In contrast, the number of open-ended schemes could grow by 13 per cent only.

majority of the rise happened in the income category. The number of schemes more than doubled, registering growth of 134 per cent. "It is mainly on the back of the industry's emerging favouritism for FMPs," said an independent observer of the fund industry.

Says the chief investment officer of a medium-sized fund house, "There is no point investing in equities if you can earn similar, or even better, returns by investing in debt funds."

With 456 schemes, the year surpassed the number of FMP launches in 2008-09, when the industry came out with 448 such products. Interestingly, after the October 2008 collapse of FMPs, the industry launched fewer FMPs in the succeeding year, mobilising a meager sum of Rs 24,026 crore, as against Rs 100 lakh crore in 2008-09.

However, according to data sourced from Morningstar India, a firm tracking the Indian fund market, fund houses mobilised Rs 1,13,416 crore through FMPs in 2010-11, well above the amount raised in 2008-09.

Dhruva Chatterji, research analyst at Morningstar, says, "In a rising interest environment, FMPs are the preferred investment option for debt investors. Further, high short-term interest rates add to their attractiveness as they are able to give higher yields."

Generally, fund houses prefer the second half of a financial year for launching FMPs as investors can get double indexation benefits. Indexation benefits help lower the capital gains, thus lowering the tax outflow. In certain scenarios, by staying invested for a little more than a year and covering two financial years, the investor is able to get inflation indexation benefit for two financial years.

This was true for 2010-11 as well. Of the total FMPs launched, over three-thirds came in the second half, post September. With 134 launches, March recorded the maximum FMP launches in a single month ever, garnering assets worth Rs 28,000 crore.

Source: http://www.business-standard.com/india/news/close-ended-mutual-fund-schemes-seesharp-rise/433856/



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

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Thursday, April 28, 2011

Quantum MF Launches Quantum Gold Savings Fund

Quantum Mutual Fund has announced the launch of the "Quantum Gold Savings Fund", an open ended fund of funds scheme which will invest predominantly in units of the Quantum Gold Fund (ETF).

The New Fund Offer opens on 28 April 2011 and will close on 12 May 2011. The scheme will reopen for continuous subscription on 26 May 2011.

The Quantum Gold Savings Fund enables investors to invest in the scheme through lump sum investment or Systematic Investment Plans (available after the scheme reopens).This fund addresses investors who wish to invest in gold, but do not have a Demat or trading account required for investing via Exchange Traded Funds (ETFs).

Commenting on giving investors some much needed respite from purity concerns, security issues and additional making charges and premiums by launching such an investment vehicle for gold, Chirag Mehta, Fund Manager - Commodities, said, "Gold has always been a much trusted investment avenue which works as a brilliant keeper of value. Even when the markets crashed in 2008, and the Sensex returns were in negative-52%, gold stood strong at 31% in INR valuation. Investors are increasingly recognizing this ability of gold to serve as a safe haven asset, but requisites like a Demat and Trading account often stop them short of investing in gold through convenient channels like ETFs. At Quantum, we believe investing is simple. And through the Quantum Gold Savings Fund we have attempted to launch a fund to ensure investing in gold retains its simplicity and cost effectiveness."

Even though the Quantum Gold Savings Fund in turn invests in the Quantum Gold Fund (ETF), there will be no investment management fee charged in the Quantum Gold Savings Fund, so that investors do not have to bear the expenses for both the schemes. Thus presenting investors with a truly cost efficient option.

The scheme offers growth option.

The scheme would allocate 95% to 100% of assets in Units of Quantum Gold Fund. On the other side it would allocate upto 5% of assets in Money Market instruments, Short-term Corporate debt securities, CBLO and units of Debt and Liquid Schemes of Mutual Funds.

The minimum application amount is Rs 500 and in multiples of Rs 1 thereafter. The Mutual Fund seeks to collect a minimum subscription amount of Rs 25 lakh under the scheme during the NFO period.

Entry load charge will be nil for the scheme. Exit load charge will be 1.5% if redeemed or switch out on or before 1 year from the date of allotment of units.

The scheme's performance will be benchmarked against the domestic price of gold.

The fund manager of the scheme will be Mr. Chirag Mehta.

Source: http://www.adityabirlamoney.com/news/471380/10/22,24/Mutual-Funds-Reports/Quantum-MF-Launches-Quantum-Gold-Savings-Fund-



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Wednesday, April 27, 2011

UTI MF Declares Dividend for Opportunities Fund

UTI Mutual Fund has announced the declaration of dividend on the face value of Rs. 10 per unit under dividend option of UTI Opportunities Fund. The record date for dividend has been fixed as 2 May 2011.

The quantum of dividend will be Rs. 0.80 per unit. The scheme recorded NAV of Rs. 14.97 per unit as on 25 April 2011.

UTI Opportunities Fund is an open ended equity oriented scheme which has the investment objective to generate capital appreciation and/or income distribution by investing the funds of the scheme in equity shares and equity related instruments. The main focus of this scheme is to capitalize on opportunities arising in the market by responding to the dynamically changing Indian economy by moving its investments amongst different sectors as prevailing trends change.

Source: http://www.indiainfoline.com/Markets/News/UTI-MF-Declares-Dividend-for-Opportunities-Fund/3664942358



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

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Low-income investors shirk micro SIPs for high costs & complexity.

The initial enthusiasm of mutual fund houses to promote micro-systematic investment plan, or SIP, an investment route to attract low-income individuals to invest regularly in equities, is waning due to high costs and regulatory hiccups.

Higher costs to service such accounts without adequate growth in investor base had been deterring mutual funds from promoting this channel. Now, the Securities and Exchange Board of India's decision to make know-your-client, or KYC, norms mandatory for even investments of less than Rs 50,000 in mutual funds has hit the final nail in the coffin of micro SIPs.

SEBI had made it mandatory for every mutual fund investor to be KYC-compliant from January 1, in a move intended to check fraudulent practices and money laundering activities. To be KYC-compliant, an investor is required to submit valid identification documents. Earlier, only those individuals investing Rs 50,000 or more needed to quote their permanent account number, or PAN.

Now, the revised norms mean even low-income investors, investing smaller amounts in mutual funds through micro SIPs, also need to provide the required documents. Mutual fund officials and distributors said a majority of the investors opting for micro SIPs, mostly workers in the unorganised sector in the two and three-tier cities, do not have documents to complete the KYC procedure.

"Many low-income individuals look for convenience while investing, as they get intimidated by procedural challenges," said Surajit Mishra, national headmutual funds of Bajaj Capital . "Greater legal requirements have discouraged them from investing in mutual funds through micro SIPs," he said.

Many top asset management companies jumped the bandwagon to offer micro SIP services to grow their business in the largely untapped rural India, but soon found that the costs incurred in selling and servicing these accounts were prohibitively high, since the investor base was not registering substantial growth. The key to profitability in micro SIP accounts is volumes.

Currently, UTI Mutual Fund , Reliance Mutual Fund , SBI Mutual Fund , ICICI Prudential Mutual Fund , Sahara Mutual Fund and Birla Sun Life Mutual Fund offer the micro SIP facility. Schemes of some of these mutual funds accept as low as Rs 50 per month through micro SIPs. The minimum accepted amount under normal SIPs is usually Rs 500 per month. A majority of the fund houses lack distribution strength to cater to small towns across the country and are finding it difficult to garner more accounts.

The problem is compounded by distributors' refusal to push mutual fund products following the ban on entry loads, the fee that mutual funds charged investors to pay distributors, since August 2009. A top official with a large mutual fund house, which offers micro SIPs, said the breakeven period for a mutual fund selling micro SIPs could be at least five to seven years.

"Micro SIPs do not make sense at all for most mutual funds as profitability is a key issue here. The costs involved in selling them were a hindrance; now KYC rules have made buying mutual funds through this route more complex," said Dhirendra Kumar, chief executive of Value Research , a New Delhi-based mutual fund tracker.

Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/low-income-investors-shirk-micro-sips-for-high-costs-complexity/articleshow/8096214.cms



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Smaller fund houses deliver higher returns

While size is much sought after in the mutual fund industry, it is the smaller fund houses which have actually delivered the best returns to investors in the past year.

Consider this. If one averages the returns across their equity schemes, Quantum Mutual Fund, Benchmark Mutual Fund and Daiwa Mutual emerge as the top performers over the past one year, managing returns of 13.4 per cent to 15.8 per cent. These funds are midgets, having under their fold only between Rs 125 crore and Rs 1,500 crore of assets. Their equity assets are lower.

Four other small houses including Mirae and Canara Robeco figure among the top 10 on returns, delivering returns in the range of 10-15 per cent. Top equity managers such as Reliance Mutual, Sundaram Mutual and SBI Mutual have in contrast delivered average one-year returns of 4-7 per cent on their schemes.

Consistency factor

Ranking all the fund houses by their one-year returns, only HDFC, Fidelity and UTI from the larger fund houses make it to the top 10 list. Even over a slightly longer timeframe of three years, smaller managers have fared well.

In fact, five out of the top 10 are small houses. Here again, HDFC and Fidelity among the larger houses delivered consistent returns.

Is it then correct to come to the conclusion that investors should bet only on schemes from smaller fund houses? Not necessarily.

Lacking variety

For one, many smaller fund houses have only a few equity schemes under operation, aiding their 'averages'. Quantum and Mirae have two and three equity schemes under management respectively.

Two, not too many of these schemes may have a long enough record to judge performance. Most of flagship funds for these funds invest in large-cap stocks, which outperformed the broader markets over the last few years.

Correct size

Here JP Morgan's AMC too needs a mention as all three of its schemes have outperformed indices over the last one-year, but has lagged behind over longer timeframes.

But is managing a smaller number of funds the only way to better returns? It seems so.

Fidelity with just six funds and DSP Blackrock with 10 schemes under management have seen consistent performance from most of them. Of course HDFC with 14 schemes has seen 11 of those perform consistently over one- and three-year periods.

But with 17-21 schemes under operation, fund houses such as Sundaram, Tata, SBI, Birla Sun Life and Reliance have found it more challenging to deliver a consistent show across schemes. Only half of their funds have outperformed indices such as the Sensex, Nifty or BSE 100.

Source: http://www.thehindubusinessline.com/markets/stock-markets/article1763923.ece?css=print


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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Tuesday, April 26, 2011

Is it Time to Dump Your Fund?

What are the things to watch out for that could ring alarm bells that tell you it's the right time to exit a fund?

Your advisor might have told you which mutual fund schemes to buy and how much you should earmark out of your overall investment portfolio for each of the schemes. But did he come back calling at any time to tell you which of the schemes are not performing well, or about the ones where the future does not look bright?

Most often, intermediaries don't bother to revert with the tip on when to prune your holding in a fund scheme or exit it fully. Maybe your advisor is avoiding you because he himself convinced you to buy the scheme, which doesn't look like a great investment now. So, an investor is left with the fait accompli of having to take the 'sell' call, whenever required, on his own. And in a dynamic and volatile environment it may not be an easy call to take.

The triggers could be of a wide range. According to market experts, investors can look at whether the fund has been a consistent laggard, the developments within the fund house, the change in the character of the fund and its composition. A decision to exit the fund can also be taken based on the altered life-goals of a person. So, what are the things to watch out for that could ring those alarm bells that tell you it's the right time to exit a fund?

Not always the past

Wealth management experts say the decision to enter or exit a mutual fund can hardly be based just on a fund's performance in the recent past. "It involves greater science than just looking at the fund's returns," says Vishal Kapoor, general manager, wealth management India, Standard Chartered Bank.

Past performance, more often than not, is not sustainable. For instance, infrastructure funds, at the helm during the bull run of 2007, fell flat after the financial crisis that began in late 2008 with many languishing in the bottom quartile today. UTI Infrastructure Fund, for instance has returned a negative 10% return in the last one year, compared to 72% gains it delivered in 2007. As an investor, it is important to know that different sectors outperform at different times. FMCG and pharmaceuticals, for instance, are known to be defensives and do well during recessionary phases. On the other hand, sectors such as capital goods and commodities do well during bull runs.

"Although returns are the easiest way to gauge the performance of a fund, it shouldn't be considered in isolation, says Fahima Shaikh, assistant manager, products, IIFL. So, how do you decide whether your mutual fund portfolio needs refurbishing? The fund's consistency in returns, the fund's strategy and how it co-relates with your investment objective is what you should study," says Kapoor.

In a race to the bottom?

According to Kapoor, if your fund has consistently been among the bottom 25%, in terms of performance, in its category, for a year, it may be worthwhile to exit the fund. Analysts say, a fund's performance should always be compared to a benchmark such as the Sensex and to other funds in its category. This kind of comparative analysis gives a clear picture about the standing of the fund within its universe. For instance, when compared to the returns given by the Indian markets in the last one year, equity funds focused on international markets outperformed by a large margin. They delivered a return of 20% compared to 8% by the Sensex.

The performance of Birla Sun Life's Commodities Precious Metal Fund when compared to its benchmark, the Dow Jones Precious Metals Index shows that for the period, January 2010 to January 2011, it has given a return of 25%, lower than the index which returned 36%. Although the fund has done better than Indian equities, the investor could look at better performing funds in the precious metals category.

On the other hand, in the last one year (March 2010-February 2011) we have seen some of the worst performing funds from the JM Mutual Fund stable. JM Basic Fund -which will soon have two more funds from the same group merged into it-has delivered a negative return of 26% compared to 9% delivered by the BSE-200. The fund mainly invests in basic industries like power, industrial goods, metals etc, with the BSE-200 as its benchmark and falls in the same league as multi-sector funds such as Birla Sun Life Basic Industries Fund. The fund's consistency has somewhat been in doubt through various periods. During the bull runs of 2007 and 2009, the fund has been among the best performers but during the recent downturns it was one of the biggest losers.

HSBC Progressive Themes fund, too, is a laggard among its peers as far as returns of the last six months to two years are concerned. It gave a negative return of 13.22% in the last one year. Its peers include large and mid-cap funds such as DSP Opportunities Fund, which, according to Valueresearchonline, gave a return of 12% in the last one year.

Risk vs return

Analysts often use the Sharpe ratio which helps you gauge how much of the extraordinary returns generated by a fund are a result of extra risk taken by the fund manager. A higher ratio indicates that the investor is earning a good return despite low risk. Joseph Thomas, head, investment advisory and financial planning, Aditya Birla Money, however, prefers to measure a fund's consistency by looking at rolling returns, among other parameters.

For those not familiar with the term, 5-year rolling returns of a fund for a particular year are the average annualised returns of the last 5 years ending with the year for which returns are being calculated. Thomas also recommends schemes with a beta level of less than 1, the beta level representing the risk of a portfolio in comparison to the stock market risk.

Scrutinising the portfolio

"Another factor, often ignored is the portfolio of a fund or its strategy which is vital for assessing a fund's health," says Shaikh. According to her, investors must know how a fund has been constructed and what kind of stocks and sectors the fund is exposed to.

"If the investor is uncomfortable with the portfolio and feels it has deviated from the mandate, then he can decide to switch to other funds," she adds. Sometimes, funds change names or investment mandate to attract more customers or to get rid of a tag that didn't appeal to investors. For instance, JM Auto Sector Fund was re-christened as JM Mid Cap Fund and JM Healthcare Sector Fund became JM Large Cap in May 2009.

Also, during the technology boom of 1999, almost every fund house launched a technology fund or its variant, but when the bubble finally burst, funds had to either rename their schemes or alter the fund philosophy. In 2002, Tata IT Sector Fund, for instance, morphed itself into Tata Select Equity Fund which has a much broader mandate. Though the change has been good for the fund, it could be in sectors that are quite unrelated to what you had in mind. So, do be aware of such changes in a fund's portfolio and keep your investment in such funds on your watch-list.

Know the inside story

Typically, fund houses go through many changes in their lifetime. A change at the helm or a new fund manager may end up being detrimental to the health of your fund. This happens in organisations where the fund manager drives the investment decisions and thus, the returns. Other factors include a change in ownership of the asset management company, exit by existing shareholders or any other news or information which could cast doubts on the sustainability of the business venture, says Thomas.

Last but not the…

If there has been a change in your life goal, you need to re-evaluate your portfolio. This could happen when you have already achieved your goal of buying a house or your child's education. "It may be time to modify your portfolio, say, move to debt as you get closer to retirement," says Gaurav Mashruwala, certified financial planner.

And then there are times when the changing market trends can present alternative investment strategies that could work better for you. Adarsh Shamdasani, a long-term investor in the market, recalls the above-average returns that arbitrage funds posted 3 years ago. "One-year returns were in the range of 8-9% around 2007, with the added benefit of their being tax-free investments," she says. However, it didn't last too long. The reduced arbitrage opportunities in the market and increase in the number of funds chasing limited opportunities has led to a fall in average returns to 6.5%. Today, you are better off investing in a fixed deposit or a Fixed Maturity Plan (FMP), which offers better tax-adjusted returns. An FMP, for instance, is now yielding 9.5-10% for a one-year deposit, almost tax-free after adjusting the tax liability to inflation.

The size of a fund, too, can become a deterrent sometimes. Reliance Growth, for instance, became too big for the fund manager to handle and at one point it stopped accepting any fresh investments.

"When the fund is of a reasonable size, say, worth Rs. 1000-2000 crore, given the liquidity and depth of the Indian markets, it is more easily manageable but too big a size brings in difficulties with respect to meaningful modifications," adds Thomas. So, a constant review of the fund's size is a good idea, he says.

However, it may not pay to be over-cautious. Although constant portfolio review is absolutely necessary, one shouldn't get bogged down by daily tracking of one's investments, whether it is mutual funds or any other asset, says Kapoor of Standard Chartered Bank.

Source: http://www.indiainfoline.com/Research/Articles/Is-it-Time-to-Dump-Your-Fund/25547445



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Kotak MF Declares Dividend for Emerging Equity Scheme

Kotak Mutual Fund has announced the declaration of dividend on the face value of Rs. 10 per unit under dividend option of Kotak Emerging Equity Scheme. The record date for dividend has been fixed as 29 April 2011.

The quantum of dividend will be Rs. 0.75 per unit. The scheme recorded NAV of Rs. 11.553 per unit as on 21 April 2011.

Kotak Emerging Equity Scheme is an open ended equity growth scheme which has the investment objective to generate long-term capital appreciation from a portfolio of equity related securities, by investing predominantly in mid and small cap companies.

Source: http://www.indiainfoline.com/Markets/News/Kotak-MF-Declares-Dividend-for-Emerging-Equity-Scheme/3660081733



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Equity MF pullouts hit a high in 2010-11

With the markets remaining volatile for the best part of 2010-11, exits made by equity MF investors , who were wary of losing their gains, hit a record high. Redemptions or the money pulled out by investors from equity MF schemes have topped Rs 79,730 crore in fiscal 2011, the highest ever, data with the Securities and Exchange Board of India (Sebi) shows.

Interestingly, redemptions from equity schemes in 2010-11 is even higher than thatof 2007-08 when they took out Rs 79, 353 croreon theback of a sharp rise in the equity markets. Investors booked profits whenever the benchmark indices traded close to their all-time highs in fiscal 2011, analysis shows.

The 27.4% y-o-y rise in redemptions from equity schemes has also led to a sharp fall in folios or investor accounts. Equity MFssaw net outflows (difference between sales and purchases made by investors) of Rs 13,138.1 crore, Sebi data shows.

The folios held by investorsin equity MFschemesfell by over 18 lakh to 3.92 crore in 2010-11. Folios in equity schemes have fallen below the 4-crore mark for the first time in three years. Investors pulled out Rs 12,804 crore from equity MF schemes in September last year, about 50% more than the previous high hit in October 2007 when the markets started trading close to their all-time highs.

A lot of investors booked profits when the markets went up ; and the general apathy shown by agents in pushing productstosmall retailinvestors ever since the ban on entry loads came also resulted in high pullouts , industry officials say.

"The real impact of the ban on entry loads (on MF sales ) was felt in fiscal 2011," says Surajit Misra, national head, MFs, Bajaj Capital, a distribution platform for funds . "Retail (investor ) participation has been quite muted ," he says. With no big asset creation happening, the bottom line of fund houses would have taken a knock last fiscal , he says.

New investors are not coming in and big-ticket participants who entered the markets remained only for the short-term , say industry officials .

Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/equity-mf-pullouts-hit-a-high-in-2010-11/articleshow/8062999.cms


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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

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IDFC MF Declares Dividend for Small & Midcap Equity Fund

IDFC Mutual Fund has announced the declaration of dividend under dividend option of IDFC Small & Midcap Equity Fund. The record date for dividend has been fixed as 29 April 2011.

The quantum of dividend will be Rs 1.50 per unit. The scheme recorded NAV of Rs 15.4885 per unit as on 20 April 2011.

IDFC Small & Midcap Equity Fund is an open ended equity fund which has the investment objective to generate capital appreciation from a diversified portfolio of equity and equity related instruments.

The scheme will predominantly invest in small and midcap equity and equity related instruments. Small and Midcap equity and equity related instruments will be the stocks included in the CNX Midcap index or equity and equity related instruments of such companies which have a market capitalization lower than the highest components of CNX Midcap Index.

The scheme may also invest in stock other than mid cap stocks (i.e. in stocks, which have a market capitalisation of above the market capitalisation range of the defined small midcap stocks) and derivatives. On defensive consideration, the scheme may also invest in debt and money market instruments.

Source: http://www.adityabirlamoney.com/news/470631/10/22,24/Mutual-Funds-Reports/IDFC-MF-Declares-Dividend-for-Small-Midcap-Equity-Fund-



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'I made my money by selling too soon.'

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Foreign MFs score better in garnering assets

Foreign players control a little over 10 per cent of the domestic fund market.

Foreign fund houses outperformed their domestic peers in terms of garnering assets in 2010-11.

In a year that saw the industry's assets decline by over six per cent, foreign players saw a marginal slip of 1.7 per cent. On the other hand, local players were beaten harder as they lost over seven per cent of assets. This is in contrast with the dominant view that foreign players would be at the receiving end, in view of domestic majors commanding an established brand equity.

The top five players in the fund market are domestic and include Reliance MF, HDFC MF, ICICI MF, UTI MF and Birla Sun Life MF. They control close to 60 per cent of the market. However, barring Birla, all the other majors saw a dip in their assets. UTI, ICICI and Reliance were the top losers, with asset erosion of 16 per cent, nine per cent and eight per cent, respectively. LIC MF witnessed a drastic loss of 74 per cent during the year.

"Foreign fund houses are now being recognised by the Indian retail investors. Our brand building is also catching up fast with homegrown players. Going forward, there is better scope as penetration is abysmally low compared to the developed markets," explains the chief executive officer of a foreign AMC having operations in India.

Currently, foreign players control a little over 10 per cent of the domestic fund market.

In absolute terms, close to Rs 50,000 crore outflowed from domestic fund houses' kitty in FY11, while foreign players witnessed an erosion of just Rs 1,263 crore.

Major foreign houses in India include BNP Paribas, Franklin Templeton, Fidelity, HSBC, JP Morgan and Morgan Stanley, among others. Officials in foreign AMCs say investors want diversification in other world markets, too. "Since many of us have a global presence, we can help investors here get exposure outside India," they add.

Puneet Chaddha, chief executive officer, HSBC Asset Management (India), says, "We have launched a Brazil fund and plan to come up with more such offerings soon. There is no doubt that it is good to remain invested in Indian markets. However, opportunities in other global regions should not also be overlooked and Indian investors are interested in such products".

Arindam Ghosh, CEO of Mirae Assets, agrees. "Indian investors have taken into consideration the performance factor. We provided them diversified products such as a China Fund and it got a good response. Soon, we plan to launch similar products which will help investors diversify in different global territories," he says.

Interestingly, in the first half of FY11, foreign houses had marched ahead with a rise of as much as 14 per cent in assets, even as domestic players were yet to move into the positive zone.

Source: http://www.business-standard.com/india/news/foreign-mfs-score-better-in-garnering-assets-/433486/



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Birla Sun Life launches Gold ETF news

Birla Sun Life Asset Management Company (BSLAMC) has launched an open-ended gold exchange traded fund, Gold ETF that is scheduled to close on 9 May.

The ETF to list on BSE and NSE has a 15-day window with a minimum application amount pegged at Rs6000 and multiples of Rs2000 thereafter.

Investors have been offered the option to convert to physical gold provided by certain vendors.

In a bid to cash in on the spurt in gold prices led by the commodities rally, a number of Indian companies and mutual funds have been working on plans to launch new Gold ETFs. HDFC, a leading Indian private sector bank launched a Gold ETF scheme last year.

According to the company, the money raised would be invested in gold of 99.5 per cent purity sourced from refineries approved by the London Bullion Market Association.

After witnessing the strongest growth of 66 per cent in demand for the yellow metal in 2010 at 963.1 T on heavy demand for jewellery, India is now seeing a boom in investment demand in the yellow metal and silver.

India's first gold savings fund, Reliance Gold fund opened for subscription on 14 February and closed on 28 February. In the process it generated a record of Rs4000 crore for a new fund offer (NFO). Reliance received applications in excess of 2 lakhs.

Meanwhile, Kotak Mahindra Asset Management Company, also recently launched its 'Kotak Gold Fund'. The unique open ended fund allows investors to take exposure to gold without holding demat account.

India has 10 funds selling gold-backed securities, with combined assets of Rs44 billion, as on 31 March, according to data from the Association of Mutual Funds in India.

Source: http://www.domain-b.com/finance/insurance/birla_sun_life_insurance/20110425_gold_etf_2.html



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Monday, April 25, 2011

Bank investments in mutual funds more than double

Investments made by banks in mutual funds soared in the fortnight ended April 8, on the back of improved liquidity.

According to the data released by the Reserve Bank of India(RBI), bank investments in instruments issued by mutual funds had more than doubled compared to the previous fortnight.

Bank investments in mutual funds were at Rs 111,279 crore on April 8 compared to Rs 47,638 crore as on March 25.

"Liquidity had improved in the first week of April as year-end pressures came off," said a banking analyst at a domestic brokerage. Liquidity had sharply turned into the surplus mode in the first week of April.

According to analysts, excess funds that banks had picked up in order to dress their balance sheets towards the financial year end.

Source: http://www.business-standard.com/india/news/bank-investments-in-mutual-funds-more-than-double/433249/



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Friday, April 22, 2011

Principal Pnb Long Term Equity Fund - Growth & Dividend Options to be Merged with Principal Emerging Bluechip Fund

Principal Mutual Fund has decided to merge growth and dividend options under Principal Pnb Long Term Equity Fund, an open ended equity scheme with respective growth and dividend options under Principal Emerging Bluechip Fund.

The notice period of exit option shall commence from 21 April 2011 and conclude on 20 May 2011.

The continuing unitholders of Principal Pnb Long Term Equity Fund as at the end of business hours on 20 May 2011, will be allotted units (basis the NAV of 20 May 2011) of Principal Emerging Bluechip Fund, in lieu of the value of their existing units in the Principal Pnb Long Term Equity Fund.

The said merger shall be effective post the closure of the business hours on 20 May 2011.

Source: http://www.adityabirlamoney.com/news/469884/10/22,24/Mutual-Funds-Reports/Principal-Pnb-Long-Term-Equity-Fund-Growth-Dividend-Options-to-be-Merged-with-Principal-Emerging-Bluechip-Fund



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Thursday, April 21, 2011

MF schemes' merger hits taxation hurdle

Mergers of mutual fund schemes are facing the tax roadblock, say market players. In the past couple of years, the Securities and Exchange Board of India (Sebi) has expressed its displeasure to fund houses over the existence of too many similar schemes. However, fund houses say the cost of merging is too high.

"Some of the fund houses have progressed on schemes' consolidation but it is not done in a major way. There are certain tax issues around it, such as STT and other tax structures," says H N Sinor, chief executive officer of Association of Mutual Funds in India (Amfi).

Since there is a fresh issue of units in the merged scheme in lieu of units in the merging scheme, the transaction is treated as a transfer under Income Tax Act, 1961. "A merger involves the redemption of funds from one or more schemes (which are to be merged) and then purchase in the surviving scheme. As there is selling and buying involved in the transaction, it attracts STT, which can be a significant amount in many cases," says the chief financial officer of a leading fund house.

Currently, the STT in mutual fund schemes' merger is 0.25 per cent of the value or Rs 25,000 on a turnover of Rs 1 crore. This is higher compared with STT of 0.125 per cent or Rs 12,500 on a turnover of Rs 1 crore charged in the delivery-based transaction in the cash market.

Another chief executive officer of a foreign fund house adds, "The STT for all such redemptions (during the notice period of 30 days prior to the date of merger from both the schemes) is normally borne by the AMC, as per the current industry practice."

He further explains, "During the notice period (exit load-free period), if the investors of the scheme, which is to be merged, are not in agreement with the merger proposal, they have the option to redeem without any exit load being charged from them."

But, if they choose to redeem before the date of merger, the tax implication is similar to any other normal redemption transaction, that is, a capital gains tax of 15 per cent in case the scheme has been held for less than a year, and STT."

While the short-term capital gains tax is borne by the investor, the question is who should pay the STT? "Though as of now we are paying it, it should be paid by the AMCs, investors or the schemes," adds the CFO.

Besides the cost factor, there are regulatory approvals that could slow down the process. The process of merging two or more schemes requires a no-objection clearance from Sebi. Following the clearance, the asset management company (AMC) has to make a declaration and allow investors in the source schemes (that are being merged) to exit within a month without any exit load.

The slow pace of the schemes' consolidation can be gauged from the fact that despite Sebi's continued nudging, only six players have merged their schemes since January, 2010. Former Sebi Chairman C B Bhave had said last year, "If the industry throws over 3,000 schemes at investors, how can one expect them to make a choice?" He had also expressed concern over several schemes not even reaching a critical mass.

Source: http://www.business-standard.com/india/news/mf-schemes-merger-hits-taxation-hurdle/432971/



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Wednesday, April 20, 2011

Will UTI AMC become 'Khosla ka Ghosla'?

According to media reports, the finance ministry is pushing the candidature of Jitesh Khosla as head of UTI AMC. However, T Rowe Price, the single largest stakeholder in the AMC, does not seem to agree
                                               
UTI Asset Management Company (AMC), one of the largest AMCs in the country, is still awaiting the appointment of a new boss, after UK Sinha left to take charge of the Securities and Exchange Board of India (SEBI) in February.

According to media reports, the finance ministry, which indirectly controls a 74% stake in UTI AMC, is in favour of its own candidate for the top post, but T Rowe Price (TRP), the single largest stakeholder in the AMC, has threatened to exit from the venture if that happens.

The Human Resources (HR) panel set up by UTI is likely to shortlist probable names of candidates for the post of chairman and managing director by the end of this month, which will be sent to the board to take a view, and the shareholders will finally appoint the chairman, according to a report from the Press Trust of India.

The fund house has also hired executive search firm Egon Zehnder to recommend a suitable candidate to the HR Committee of the board.

Paranjoy Guha Thakurta, in an article published on Rediff.com, has said, "Political circles in New Delhi and the financial world in Mumbai are abuzz with speculation about the real reason why the powers-that-be are reportedly backing the candidature of Jitesh Khosla, a 1976 Assam cadre officer of the Indian Administrative Service, to take over the reins of UTI AMC."

"Khosla's nomination assumes significance since he is the brother of Omita Paul, adviser to Union Finance Minister Pranab Mukherjee. Paul, who used to belong to the Central Information Service (later Indian Information Service), has worked as Mukherjee's confidante and adviser for decades, including his recent stints at the helm of the ministries of defence and external affairs," the article says.

Earlier, in January 2010, T Rowe Price, the US-based foreign institutional investor, completed its acquisition of a 26% stake in UTI AMC through its wholly-owned subsidiary T Rowe Price Global Investment Services for Rs650 crore and thus gained representation on the board of UTI AMC. The foreign fund acquired a 6.5% stake from each of the four original stakeholders-State Bank of India, Punjab National Bank, Bank of Baroda and LIC-amounting to 26%, in UTI Asset Management Company and UTI Trustee Company. The four original stakeholders, three nationalised banks and the insurance behemoth still hold 18.5% each, or 74% together, in UTI AMC. This gives the government an indirect control of the AMC.

"While speculation is rife as to whether the ministry wants to control UTI AMC by proxy, there is also a view that by appointing Khosla the finance ministry would be accused of nepotism. While it is not clear how strongly T Rowe Price would register its protest against attempts to appoint Khosla as the executive head of UTI AMC, the beleaguered Manmohan Singh government can ill-afford another scandal," Mr Guha Thakurta, who is also a member of the Press Council of India, wrote.

Mr Khosla is currently officer on special duty at the Indian Institute of Corporate Affairs. As joint secretary in the Union ministry of corporate affairs he had overseen the government's intervention in the Satyam scandal.

UTI Mutual Fund had assets under management (average) amounting to Rs65,387.25 crore and investor accounts of around one crore in 81 domestic schemes at the end of December 2010.



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'I made my money by selling too soon.'

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Learn why FDs are hazardous for wealth creation

Can you find anyone who has become wealthy by leaving his or her money in the bank or an FD? If you want to create wealth, you must move away from this mentality of thinking that a savings account or an FD is the best home for your money.

Much has been made of the so-called comparison between mutual funds and ULIPs in the past few months. Our opinion is that the public debate on these two investment options misses the bigger point. The reality is that the bulk of the household savings for Indian families is tied up in bank accounts earning 3.5% interest and in FDs, both of which are highly inefficient investment options for wealth creation. Add to this the announcement this week that inflation has now touched double digit levels, and its an even scarier thought that most of us still prefer to leave our money in a bank, rather than in instruments that are higher yielding, be they equity mutual funds or ULIPs.

So the real debate should be whether families in their effort to create wealth are making a mistake in leaving their money in the bank vs. choosing to invest through instruments like mutual funds and ULIPs that offer a reasonable prospect of better long-term returns.

Mutual Funds vs. ULIPs - no big deal

Call it a turf war or clash of regulators, frankly in the long run it's not a big deal from the end customer's perspective. Whether its SEBI or IRDA, consumers should feel comfortable and secure that there is a regulator who is mandated to look after their interests.

Every investment instrument has pros and cons. We challenge you to find one that is perfect. So, there will always be promoters or detractors of both mutual funds and ULIPs.

Objectively speaking, however, there is a better chance of you being able to meet your long-term financial goals through equity mutual funds and/or a ULIP than the default option for most Indians, which is to leave money in the bank.

Almost every one of us will have one of the following goals that require a substantial amount of money in the future: funding our graduate education, marriage, house purchase, taking care of children's financial needs, funding their education and marriage, being adequately funded towards our own retirement.

Experience from all over the world has shown that our salaries are not enough to fund these goals. We need to invest into the capital markets, subject to our risk taking capacity, to take advantage of the compounding of capital, i.e., money that creates more money. No lesser authority than Albert Einstein remarked, "compounding is the 8th wonder of the world because it allows for the systematic accumulation of wealth".

The advantage of equity mutual funds and ULIPs is that they are instruments that offer you a better rate of compounding for your capital than cash lying in the bank, and thereby provide a better chance of creating wealth in the long run.

Savings Accounts and FDs - bad deal for wealth creation

Let's make ourselves clear. Savings accounts and FDs have a purpose and we cannot over generalize and make a blanket statement that they are bad instruments. However, when it comes to wealth creation they are not good instruments for you to invest through. We will show you why.

First of all, a savings account earns you a mere 3.5% interest rate, a level that is fixed arbitrarily. Similarly, a fixed deposit contractually fixes the rate of return at the start date of your deposit, and you cannot earn more than what you signed up for, even if interest rates in the markets were to rise. Compare this to a return that the equity market can earn you. History and experience of equity markets from around the world suggests that in the long-term equity markets are likely to "compound your capital" at approximately 12% per annum. Compared to this, a 3.5% savings account return just does not match up.

Secondly, savings accounts and FDs are highly tax inefficient. Any interest you earn through these will be taxable in your hands as income, and you will be liable to pay tax on this income. Compare this to equity mutual funds and ULIPs where at least for the time being until the new direct tax code is implemented you pay zero taxes on your gains if you hold these instruments for the long-term. And, if you invest into an equity linked savings scheme (ELSS mutual fund) you might find this an even more tax efficient investment than a regular mutual fund.

Finally, and perhaps most crucially, by leaving your money in a bank or an FD, you are losing the purchasing power of that money. Because you are earning a fixed return through these instruments, these instruments cannot offset the corrosive effect of inflation or rising prices within the economy. If one's bank account returns only 3.5% pre-tax, but the level of prices is rising at 10%, one doesn't have to be a mathematical genius to figure out that in the long run one's standard of living will suffer. You will hardly be able to create any wealth, because whatever returns you earn does not even help you keep pace with the rising prices in the economy, let alone give you a surplus that can earn you further returns.

If you are already wealthy then FDs might be a good wealth preservation instrument, but please don't use them to create wealth for yourself.

Don't sit idle, invest actively

Putting your money into a savings account of an FD is almost akin to sitting idle. India is going through an inflection, which is likely to last for a few decades, where the equity capital markets will be the best avenue for long-term investment and a good way to build an alternate and legitimate source of wealth. If you believe in India's economic growth potential, then move at least some of your money from your bank account into a higher yielding instrument to give yourself a fair chance to create long-term wealth.

Source: http://www.ibtimes.com/articles/136289/20110420/learn-why-fds-are-hazardous-for-wealth-creation.htm



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Union KBC Equity Fund file offer document with SEBI.

Union KBC Mutual Fund files offer document with Securities and Exchange Board of India (Sebi) to launch Union KBC Equity Fund, an open ended equity schemes. The New Fund Offer price is Rs. 10 per unit.

Investment objective: To achieve long-term capital appreciation by investing substantially in a portfolio consisting of equity and equity related securities.

Options offered: The scheme offers growth and dividend option. The dividend option further offers re-investment, payout and sweep facility.

Benchmark: BSE100 Index

Loads: Entry Load - NIL

Exit Load - 1% if redeemed or switched out on or before completion of 1 year from the date of allotments of units.

And nil if redeemed or switched out after completion of 1 year from the date of allotments of units.

Minimum Application Amount: Rs. 5,000 and in multiples of Re. 1 thereafter.

Minimum Targeted Amount: Rs. 1 crore

Asset Allocation: The scheme will invest upto 75% - 100% in equity and equity related instruments including equity linked derivatives and invest upto 25% in debt and money market securities.

Fund Manager: Mr. Ashish Ranawade

Source:http://www.indiainfoline.com/Markets/News/Union-KBC-Equity-Fund-file-offer-document-with-SEBI/3653136872



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Tuesday, April 19, 2011

The nuances between liquid and ultra short-term bond funds

Investors use the category of mutual fund schemes called liquid funds (also known as money market funds) for short-term parking, as these funds are most stable in returns. There is another category of funds known as ultra short-term bond funds (earlier known as liquid plus), which are managed in a manner similar to liquid funds. It is necessary that investors are aware of both types of funds and their respective advantages that will aide in making informed decisions.

Liquid funds are those that are defined as money market funds in the offer document and invest in money market instruments of residual maturity up to 91 days. What sets liquid funds apart in terms of lowest volatility in returns among all categories of funds is that there is no mark-to-market (MTM) of the portfolio on a daily basis unless there is a trade in the secondary market in the underlying security (or securities ).

Practically there is no trade in money-market instruments and valuation of daily NAV happens on an accrual basis, i.e., by adding the coupon accrued for the day without any mark-to-market impact. Ultra short-term bond funds (USTBs) are defined as debt funds in the offer document and the fund manager is free to take securities of maturity longer than 91 days, but there is no compulsion to do the same.

Valuation of daily NAV happens as per the valuation matrix provided by the rating agencies, hence there could be a markto-market impact. However, the component of securities with residual maturity more than 91 days (for which the valuation matrix is published) is maintained on the lower side, so that the volatility in returns is limited. Returns in USTBs are marginally higher than liquids by virtue of the marginally higher portfolio maturity.

Normally, the longer the maturity of the instrument, the higher is the yield on that instrument (time value of money). USTBs have the liberty to purchase securities with maturity of more than 91 days and on an average, the portfolio maturity is longer than liquids funds. This leads to a higher accrual rate on the portfolio of USTBs. The volatility of returns in USTBs is marginally higher than liquids funds due to the small MTM component.

Operational aspects:

In liquid funds, purchase is T-1, i.e., cleared funds are given to the AMC by the cut-off time of 2 pm and availing of previous day's NAV. Redemption is T+1, i.e., the redemption request is placed within the cut-off time of 3 pm and the proceeds are received the next day.

In USTBs, purchase is on a T+0 basis, i.e., that day's NAV would be applicable. If the amount is more than Rs 1 crore, clear funds have to be given to the AMC by the cut-off time of 3 pm, otherwise the NAV of the day on which clear funds are being given will be applicable. Redemption is T+1 for USTBs as well. For both fund categories the application should be submitted and time stamped at the AMCs'/RTA's office within the cut-off time.

Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/analysis/the-nuances-between-liquid-and-ultra-short-term-bond-funds/articleshow/8023215.cms


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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

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ING IM launching ING OptiMix Financial Planning Fund

  • Carefully Selected Mutual Funds From Different AMCs in One Fund
  • Plus Allocation Across 4 Asset Classes
  • With 4 Separate Plans To Suit Different Risk Tolerance Levels

ING Investment Management India is launching its ING Optimix Financial Planning Fund (an open ended fund of funds scheme) aiming to simplify investing in mutual funds. The most unique feature of this fund is its ability to invest across carefully selected best of breed Funds from different asset management companies in one convenient fund. In addition, investors can invest in 4 different asset classes; Liquid Funds, Debt Funds, Equity Funds and Gold ETFs while getting the flexibility to choose from 4 convenient plans that cater to different risk tolerance levels investors may have.

"Mutual fund investing today has become complex and stressful. Investors need to choose from thousands of funds, closely track their performance, take decisions to retain or change funds, attract tax liability if funds are changed before 12 months and finally, reconcile all these holdings at the end of the year. These are real concerns of investors today. ING IM's unique Multi Manager Fund of Funds capability simplifies all of this in an instant" says Navin Suri, MD & CEO, ING Investment Management India. "We fully leverage our expertise as Fund Managers ourselves in selecting the best of breed funds from across the industry, with no bias whatsoever towards our own funds. ING has been offering Multi Manager funds in India since 2006 and already manages close to Rs. 347 Cr from a wide base of nearly 30,000 investors." (as of 31st March 2011)

About ING Investment Management:
ING Investment Management was established in India by ING Groep through its wholly owned subsidiary, Nationale Nederlanden Interfinance B.V. Headquartered in Amsterdam, Netherlands. ING Investment Management (IIM) India is well poised for growth in India, backed by the support of ING's global investment engine and the vast footprint of the ING India franchise. IIM India serves over 120,000 clients (as of 30th Nov '10) across corporate, HNI and mass affluent channels through a network of affiliates including the ING banking & Insurance channels, which form the core of this distribution. People are at the heart of its success. IIM India today attracts talent from across industries and aspires to be an employer of choice in the asset management industry. Present in India since 1998, IIM in India today is well established and offers both single and multi-manager products across a range of asset classes. This is a unique combination that supports it's differentiation in a crowded market place of over 44 other players.

http://www.business-standard.com/india/news/ing-im-launching-ing-optimix-financial-planning-fund/432626/



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Franklin Templeton MF Declares Dividend for FT India Dynamic PE Ratio Fund of Funds

Franklin Templeton Mutual Fund has approved the declaration of dividend on the face value of Rs. 10 per unit of FT India Dynamic PE Ratio Fund of Funds. The record date for dividend has been fixed as 21 April 2011.

The quantum of dividend will be Rs. 0.440 per unit for Individuals & HUF and Rs. 0.411 per unit for Others. The scheme record NAV of Rs. 34.4324 per unit as on 13 April 2011.

FT India Dynamic PE Ratio Fund of Funds is an open ended Fund of Funds scheme which has the investment objective to provide long-term capital appreciation with relatively lower volatility through a dynamically balanced portfolio of equity and income funds.

Source: http://www.indiainfoline.com/Markets/News/Franklin-Templeton-MF-Declares-Dividend-for-FT-India-Dynamic-PE-Ratio-Fund-of-Funds/3649225041


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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

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Controversy brews over who will head UTI AMC

In this season of controversies, a new one is brewing with the largest stakeholder in the UTI (Unit Trust of India) Asset Management Company threatening to pull out alleging that the Union ministry of finance is thrusting its own candidate as the chairman and managing director of the company which runs India's fourth largest mutual fund.

Political circles in New Delhi and the financial world in Mumbai are abuzz with speculation about the real reason why the powers-that-be are reportedly backing the candidature of Jitesh Khosla, a 1976 Assam cadre officer of the Indian Administrative Service to take over the reins of UTI AMC -- once India's largest mutual funds organisation which today manages assets worth Rs 67,189 crore (Rs 671.89 billion).

Khosla's nomination assumes significance since he is the brother of Omita Paul, adviser to Union Finance Minister Pranab Mukherjee. Paul, who used to belong to the Central Information Service (later Indian Information Service), has worked as Mukherjee's confidante and adviser for decades, including his recent stints at the helm of the ministries of defence and external affairs.

It recently transpired that the American firm T Rowe Price (TRP), which acquired a 26 per cent stake in UTI AMC, has resented the interference from the finance ministry which has been pushing for Khosla, whose candidature had earlier been rejected by the consulting firm that had been engaged to find a successor to U K Sinha, former CMD of UTI AMC who took over as head of the Securities and Exchange Board of India in February this year.

Source: http://www.rediff.com/business/slide-show/slide-show-1-row-over-who-will-head-uti-amc/20110418.htm



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Monday, April 18, 2011

IDFC Premier Equity Fund: Less vulnerable to fluctuations

IDFC Premier Equity Fund is designed to invest in upcoming, but promising businesses available at cheap valuations, and hold on to these businesses until they reap desired returns. The experiment has been successful so far, and IDFC Premier Equity has emerged as one of the top performing mutual fund schemes in the mid- and smallcap category of equity schemes. While the scheme is an open-ended equity fund, i.e. open for subscriptions throughout the year, it has a unique philosophy to limit fresh inflows.

Thus, while an investor can always take the systematic investment plan (SIP) route to invest in the scheme throughout the year, inflows through a lumpsum investment have been restricted. Since inception, IDFC Premier Equity has been opened for lump-sum investments only thrice so far - June 2006, October 2007 and January 2010 for a brief while only. It has now been opened for lumpsum investments once again in April 2011, but again for a brief period only.

PERFORMANCE

Though launched at the end of 2005, IDFC Premier Equity has exhibited its potential only after Kenneth Andrade took over the management of the fund in early 2007. Strictly adhering to its philosophy of "buying cheap but good, and selling high", this fund has zipped past performance of many other well-established schemes in the category by distinctive margins. It zoomed past the 63% gains by its benchmark index - BSE 500 - by an overwhelming 111% in 2007. Then again, it succeeded in restricting its fall to about 53% against BSE 500's 58% in the meltdown year of 2008.The recovery era of 2009 saw the fund at its best once again, delivering 102% against BSE 500's 90% while last year despite extreme volatility on the Indian bourses, the investors of IDFC Premier Equity reaped a handsome 32% gain as against BSE 500's 16%. Thus, so far, since the time of its launch, this scheme has enriched its investors by more than 226% absolute gains against 112% absolute returns by BSE 500 during the same period. This implies that every Rs 1,000 invested in IDFC Premier Equity in September 2005 has grown to about Rs 3,263 today.

PORTFOLIO

It is rare to find extremely popular and wellestablished scrips in the portfolio of IDFC Premier Equity. One can, however, definitely hunt for companies currently available cheap, but which have good growth potential and revenue earning visibility. IDFC Premier Equity was one of the very few schemes to pick up the then nonperforming stocks like Bata India in 2008. Similarly, it was one of the few schemes to foresee the embedded potential in the initial public offers (IPO) like Page Industries. Such stocks like Bata and Page have turned out as multi-baggers for the fund. Some of its other astute and timely picks include Motherson Sumi, Glaxosmithkline Consumer Healthcare , Bluedart Express, IRB Infrastructure, Coromandel International, Shriram Transport Finance and Asian Paints. Each of these scrips was picked at extremely cheap valuations way back in 2008-09 and has reaped remarkable yields for the fund so far.

The fund manager appears to be on a hunting spree once again as the fund's latest portfolio is loaded with a good number of new picks. These include Globus Spirits, Tilaknagar Industries, United Spirits, Whirlpool, Bajaj Electrical, Kaveri Seed, Gujarat State Petronet, P&G Hygiene & Healthcare, Nilkamal, PTC, Arvind and Cox & Kings. A high exposure to an otherwise defensive FMCG sector is clearly evident and this, once again, signals the fund manager's investment approach of sailing against the tide. Despite Banking and Financials being the most sought after sectors currently by most mutual fund schemes, IDFC Premier Equity prefers to stick to its reflexes and has opted for FMCG instead. Will the dice roll in favour of the fund manager once again - as it has been in the past - will be worth a watch!

OUR VIEW

Notwithstanding the fact that IDFC Premier Equity falls under the cadre of mid- and small-cap categories of schemes, its astute equity picks make the fund less vulnerable to this presumed high risk category. Investors with little risk potential can consider IDFC Premier Equity for investments. Investors may do well to consider a target investment period of 3-5 years as the companies sought by this scheme may take time to reap returns.

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'I made my money by selling too soon.'

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Five large MFs control half of the mutual fund industry assets.

The number of fund houses are increasing each year in the fast growing Indian economy but when it comes about the size, the top five players control over half of the country's mutual fund business.

An analysis of average assets under management (AUM) by over 40 fund houses shows that the top five layers-- Reliance MF, HDFC MF, ICICI MF , UTI MF and Birla Sun Life -- together control more than half of the total assets managed by the MF industry in India.

The Indian mutual fund industry is valued worth Rs 7 lakh crore as per the latest data available with the industry association Association of Mutual Funds in India (AMFI).

And putting together, these top five fund houses own assets worth nearly Rs 4 lakh crore, which is about 55 per cent of the average AUM of all the fund houses.

A number of new players are entering the field each year. Only recently, capital market regulator SEBI gave its green signal to financial houses like Union Bank of India , India Infoline and Indiabulls to operate MF business.

Total assets under management (AUM) of 41 fund houses in the country rose to Rs 7,00,538 crore at the end of March, according to AMFI data.

At the end of last month, the AUM of the largest MF in India, Reliance MF stood at Rs 1,01,576.60 crore. This was followed by HDFC MF whose average assets was Rs 86,282.24 and ICICI Prudential MF with an AUM of Rs 73,466.10 crore.

Besides, UTI MF's assets stood at Rs 67,188.82 crore and Birla Sun Life at Rs 63,696.2 crore in end-March, 2011.

The total AUM of the remaining 36 fund houses currently stands at about Rs 3.09 lakh crore.

The MF industry, which is facing withdrawal pressure, saw their asset base dwindle over the last year. The average AUMs of the industry declined by over 6 per cent in March-end, from Rs 7.47 lakh crore at the end of March 31, 2010.

Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/analysis/five-large-mfs-control-half-of-the-mutual-fund-industry-assets/articleshow/7980798.cms



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'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
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Friday, April 15, 2011

Inflows into ELSS funds down by almost 60%

Lack of clarity on tax implications under the impending new rules and poor returns kept retail investors away from tax-saver mutual fund schemes last fiscal, when inflows plunged 58%.

Net inflows into equity-linked saving schemes, which provide tax benefits to investors, dropped to 606 crore last fiscal from 1,437 crore a year earlier. At the peak of the bull market in 2007, these funds raised assets worth 5,499 crore in the "tax-season months" between October 2007 and March 2008.

"Investors are shifting from lump-sum investment to the systematic investment plan. This trend has hit inflows into tax-savers in a big way," said Karan Datta, national sales head, Axis Asset Management . Another reason for the low investment flow into tax-savers, according to Mr Datta, is the inadequate support from fund distributors. "The number of IFAs (independent financial advisors) selling mutual funds has come down significantly over the past year."

According to fund industry sources, investors are also put off by the average performance of tax-savers over the past year - while the 30-share Sensex gained about 8%, ELSS, as a fund category, generated just over 6% returns.

Tax-savers, with an asset base of over 25,500 crore, form 4% of the overall fund industry asset base of 5.92 lakh crore.

"Traditional investment products like PPF, national savings certificates, traditional insurance schemes and retail bond issuances were the major recipients of retail money this fiscal year," said K Venkitesh, national head - distribution, Geojit BNP Paribas Financial Services . " ELSS did not evince much interest as investors are unclear about the fate of tax-saving products under the direct tax code."

As per the direct tax code, investors will not be able to get tax benefits if they invest in ELSS or ULIPs. The DTC shall be effective from April 1, 2012.

Tax-saver bond issuances by IDFC, IFCI, L&T and PFC also ate into the ELSS pie. Retail tax saving bonds, with coupon rates ranging between 9% and 9.5%, have raised over 5,000 crore from retail investors over the past six months, wealth managers said.

Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/inflows-into-elss-funds-down-by-almost-60/articleshow/7976978.cms


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___________________________________________________________________________________
'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
___________________________________________________________________________________

Wednesday, April 13, 2011

Canara Robeco MF Announces Change in Key Personnel

Canara Robeco Mutual Fund has announced that Mr. Soumendra Nath Lahiri has been appointed as Head - Equities of Canara Robeco Asset Management Limited. He is aged 44 and holds B.E, PGDM as his educational qualification. He has an overall experience of 21 years. In his previous assignment he has been Chief Investment Officer - PMS Equity Investment with Emkay Investment Managers Limited (January 2011 to March 2011), Chief Investment Officer - Advisory Services with Fortuna Capital (May 2008 to December 2010), Co-Head - Equities with DSP Merill Lynch Investment Managers Private Limited (June 2004 to March 2008) and Head - Equities with Dolat Capital Market Private Limited. (September 1995 to May 2004).

Change in Fund Management Responsibilities

Soumendra Nath Lahiri will manage Canara Robeco Emerging Equities, Canara Robeco Multicap, Canara Robeco Nifty Index, Canara Robeco Equity Diversified, Canara Robeco F.O.R.C.E Fund, Canara Robeco Infrastructure, Canara Robeco Equity Tax Saver, Canara Robeco Large Cap + Fund, Canara Robeco Balance and Canara Capital Protection Oriented Fund - Series 1 - 36 Months (Plan A).

Ritesh Jain will manage Canara Robeco Monthly Income Plan.

Akhil Mittal & Suman Prasad will manage Canara Robeco Dynamic Bond Fund, Canara Robeco Treasury Advantage Fund, Canara Robeco Gilt, Canara Robeco Short Term Fund, Canara Robeco Liquid and Canara Robeco Floating Rate. The changes will be effective immediately.

Source: http://www.adityabirlamoney.com/news/468567/10/22,24/Mutual-Funds-Reports/Canara-Robeco-MF-Announces-Change-in-Key-Personnel



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___________________________________________________________________________________
'I made my money by selling too soon.'

Website: http://indianmutualfund.co.cc/

Blog:http://indianmutualfund.wordpress.com/
___________________________________________________________________________________