Mutual Fund NEWS Group: January 2013

Thursday, January 17, 2013

AMFI to waive registration fees from first time mutual fund distributors

Industry body Association of Mutual Funds in India (AMFI) today decided to waive registration fees, estimated at Rs 3,000, for first time distributors for a period of five months beginning February 1.

The initiative is aimed at enlarging distribution network and attracting new cadre of distributors or Independent Financial Advisors (IFAs) for selling mutual fund products, AMFI said in a release here.

AMFI has "decided to waive registration fees for all registrations of first time distributors for a period of five months from February 1, 2013 to June 30, 2013."

The objective is to create larger number of 'feet-on-street' to distribute mutual fund products, AMFI Chief Executive H N Sinor said.

In November last year, AMFI had slashed registration fees to Rs 3,000 for three years per distributor from Rs 5,000.

The distributors registering under the category of individuals, including senior citizens and new cadre of distributors, need not pay the registration fees during the five-month period, the release said today.

After two years of successive decline, the mutual fund industry managed to register rise in assets base nearing Rs 8 lakh crore with an increase of about Rs 2 lakh crore in 2012.

As per industry data, the total assets under management (AUM) of all the fund houses put together rose by 30 per cent on strong inflows in fixed income, gold schemes and liquid funds.

Market regulator SEBI last year introduced a new cadre of distributors, who have been allowed to sell units of simple and performing schemes to increase the strength of mutual fund distribution network.

Source: http://www.indianexpress.com/news/amfi-to-waive-registration-fees-from-first-time-mutual-fund-distributors/1060214/0

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LIC Nomura Mutual Fund re-launches ULIS with more features

LIC Nomura Mutual Fund has re-launched its open ended Unit-Linked Insurance Scheme (ULIS) today with additional features aiming at Rs 500 crore assets under management (AUM) by the end of FY13, with one lakh new investors.

"ULIS has a good track record since 23 years. With additional features, we expect the fund to have Rs 500 crore AUM, with one lakh new investors," LIC Nomura Mutual Fund CEO Nilesh Sathe told reporters today.

The asset management company has tied up with 14 banks to sell this scheme, he said.

At present, ULIS has Rs 140 crore AUM, he said, adding that in three years, it plans to have Rs 1,000 crore AUM for the scheme.

The scheme's additional features include free accident cover up to Rs 1 lakh, guaranteed maturity bonus of 2.5 per cent to 10 per cent of target amount; no exit load as well as auto cover option, besides low-cost life insurance.

Fund allocation is balanced with 65 to 80 per cent invested in equity and 20 to 35 per cent in debt, he said.

The fund, which has three-year lock-in period, allows partial withdrawal subject to minimum balance requirement and top-up facility.

Investment in ULIS as well as its dividend is tax free.

Source: http://www.indianexpress.com/news/lic-nomura-mutual-fund-relaunches-ulis-with-more-features/1059685

Sebi cancels registration of Fidelity Mutual Fund

Capital market regulator Sebi has cancelled the registration of Fidelity Mutual Fund following its buyout by L&T Finance.

The decision was taken following the acquisition of Fidelity Mutual Fund by L&T Finance and at the request of FIL Fund Management, the Asset Management Company (AMC) of Fidelity Mutual Fund.

Securities and Exchange Board of India (Sebi), through its letter dated January 14, has "cancelled the certificate of registration of Fidelity Mutual Fund and has withdrawn the approval granted to FIL Fund Management to act as the Asset Management Company."

Consequently, Fidelity Mutual Fund, FIL Trustee Company and FIL Fund Management cannot carry out any activity as a Mutual Fund, Trustee Company and asset management company, respectively, with immediate effect.

In November, L&T Finance, a part of diversified group Larsen & Toubro, had completed the acquisition of Fidelity's mutual fund business in India for an undisclosed amount.

L&T Finance is a part of engineering conglomerate L&T Group and Fidelity Mutual Fund is part of the US-based

Fidelity Worldwide Investment.

Source: http://www.indianexpress.com/news/sebi-cancels-registration-of-fidelity-mutual-fund/1060190/

Wednesday, January 9, 2013

Mutual funds start lining up RGESS offerings

Fund houses have begun lining up mutual fund schemes focused on the government's newly proposed Rajiv Gandhi Equity Savings scheme (RGESS), which aims to attract first-time small investors into the capital market by offering them tax benefits.

Two state-owned fund houses --SBI and IDBI, as also one private fund house DSP Blackrock have filed draft offer documents for such schemes with the market regulator Sebi, while others may soon follow the suit.

Filing draft papers is mandatory before launching new schemes and the regulator usually takes about three-four weeks to clear these schemes.

"RGESS is likely to help improve penetration of mutual funds among the retail investors in the country. This scheme will not only create awareness, but it also has the potential to channelise retail money to capital markets in an informed manner," ICICI Prudential AMC MD and CEO Nimesh Shah said.

"The scheme is only for the first time investors in the capital market and there is a huge potential in the country. But only three fund houses have filed draft papers as without knowing the target audience they cannot go for the scheme and investors are required to have demat accounts, "Quantum Asset Management Company CEO Jimmy Patel said.

DSP BlackRock had filed the draft papers with Sebi within days of issuing guidelines by the regulator, while IDBI and SBI had submitted the draft details last week.

In order to encourage flow of savings in the financial instruments and improve the depth of the domestic capital market, Sebi last month announced the framework for Rajiv Gandhi Equity Savings Scheme.

Under the scheme, new investors can avail tax benefits who invest up to Rs 50,000 in the stock market and whose gross total annual income is less than or equal to Rs 10 lakh.

Source: http://www.indianexpress.com/news/mutual-funds-start-lining-up-rgess-offerings/1056841/0

Mutual Fund average AUM rose to its highest level in more than 2 years

Indian mutual funds' average assets under management (AUM) rose by 5.3% or Rs 392 bn to Rs 7.87 trillion in the October-December 2012 quarter from Rs 7.47 trillion in the previous quarter (excluding fund of funds) as per the latest numbers released by the Association of Mutual Funds in India (AMFI). This is the highest level since September 2010 (when AMFI started declaring quarterly average numbers) and the third consecutive quarterly gain in mutual fund assets.

The growth in assets in the latest quarter was primarily driven by inflows into income and gilt funds. Further, assets grew by 15% or Rs 1.05 trillion in the calendar year 2012 vis-a-vis 1% growth in 2011.

Source: http://articles.economictimes.indiatimes.com/2013-01-07/news/36192900_1_mutual-fund-assets-amfi

Monday, January 7, 2013

Mutual funds remained heavy net sellers of equities in December

All's well that ends well, so goes the adage. However, in 2012 that remained a distant dream for India's mutual fund industry's equity segment.

The struggling sector failed to attract retail investors even in the last month of the year when optimism rose significantly higher on equity to be an outperforming asset class in the coming years.

December witnessed the second largest net selling by equity fund managers during the year as they sold shares worth Rs 2,700 crore amid redemption pressure.

Despite being a flat month when indices gained a marginal half percentage point, sector officials say, investors' request for redemptions from equity schemes continued unabated.

According to the chief investment officer (CIO) of a large fund house, no one would want to take a cash call when there are anticipations for a turnaround in the market. "So, when investors want to redeem, as they had been doing for the last two to three years, we have no alternative but to sell our holdings," he admits.

Though industry body Association of Mutual Funds in India ( Amfi) would release the monthly data of fund inflows next week, industry insiders say sales remained poor and December would not be any better than the previous months.

In a year that saw the country's benchmark stock indices give returns of over 25 per cent, the mutual fund industry remained a net seller in a rising market. Rather, in the October-December quarter, the sale of shares only intensified as the fund industry sold equities worth Rs 7,615 crore.

During the full year, equity managers sold shares worth Rs 17,955 crore.

"Unfortunately, in last year's rally domestic investors did not participate," adds the CIO. According to statistics available from the Securities and Exchange Board of India ( Sebi), till November 2012 the industry had lost over three million equity folios.

The national sales head of a private bank-sponsored asset management company ( AMC), says, "The equity segment remained a big problem. Purchases remained poor compared with redemptions. But, I believe as the situation improves, retail will come back."

Net outflows from pure equity schemes stood at Rs 9,370 crore till November, which during the corresponding period in the previous year was in positive territory with net inflows of Rs 3,236 crore.

This is despite the fact that several schemes, including banking equity schemes, FMCG schemes and pharma schemes among others, outperformed the benchmark indices during the year. For instance, schemes which primarily invest in banks and FMCG companies gave returns of over 50 per cent during the year while those of pharma-related schemes rewarded investors with over 30 per cent returns.

Source: http://business-standard.com/india/news/mutual-funds-remained-heavy-net-sellersequities-in-december/497641/

Wednesday, January 2, 2013

Banking, FMCG funds top Mutual Fund return charts in 2012

Mutual funds focused on banking, FMCG and midcap stocks topped the return charts for investors in 2012, while those investing in IT stocks fared the worst, albeit with modest gains.

As per an analysis of net asset values for all mutual fund schemes during 2012, the banking funds have an average 55 per cent return in the year, as against appreciation of 26-28 per cent in the broader benchmark indices.

The FMCG funds came a close second with average return of 48 per cent in 2012, followed by midcap schemes (41 per cent), multicap funds (33 per cent) and pharma funds (32 per cent).

Tax funds, a popular avenue for saving taxes, gained 31 per cent in calendar year 2012.

"Some sectors which gave extraordinary returns in this period include Banking, FMCG and Consumer Durables. Stocks in sectors such as IT, Power and Oil & gas didn't do as well in 2012. Largely, investors currently favour stocks in consumption sector give some of macro winds," said Atul Kumar, Senior Fund Manager, Quantum MF.

Infrastructure equity funds rode on the back of market rebound to give investors 25 per cent average gain in 2012. International equity funds (14 per cent), arbitrage funds (9 per cent) and IT funds (6 per cent) were the poorest performers in the year gone by as their chosen themes did not play out well as the winners.

Gold funds, which saw copious inflows, gave an average 11 per cent gain in 2012 as the precious metal prices inched up. In the fixed income fund space, Gilt medium and long term funds walked away with the honors of best average gains (10.5 per cent), followed by income funds (10.1 per cent), short-term income schemes (9.8 per cent), liquid funds (9.2 per cent) and gilt short-term funds (8.3 per cent).

"Most short-term debt funds and dynamic bond funds have also increased duration and exposure to government securities to take advantage of a fall in yields," said Sachin Jain, analyst at ICICIdirect.com.

Among the hybrid fund categories, equity-oriented funds gave an average 27 per cent gains while the debt oriented ones mirrored the fixed income gains of around 13 per cent.

Source: http://www.indianexpress.com/news/banking-fmcg-funds-top-mutual-fund-return-charts-in-2012/1052881/0