Mutual Fund investment in India is a pick up. Mutual funds are collective investment schemes that clubs money from investors and invest in securities like stocks and money market instruments. For investment in Mutual Fund, there are a number of mutual funds in the country, both domestic as well as international players.
One of the most important reasons why mutual fund investment is preferred investment tool in India is because they offer the investors the ability to easily invest in complex markets. According to a survey, mutual fund investment in India constituted around 40 per cent of stock investment plan in 2007. But these are certainly bad times even for mutual fund investors. The worst sufferers in the present market are those funds that have investment portfolios of small and mid-cap stocks. Moreover, tax-saving mutual funds too have performed badly with Principal Personal Tax saver witnessing losses of 80 per cent from its high.
Investors looking for impressive returns from mutual fund investment in India are also disappointed by balanced funds (having equity exposure of around 65-75%). Balanced funds invest both in stocks and fixed income securities as per the prescribed proportion in their offer documents. For the four-month period (July-October), there has been 30 per cent drop in values of average balanced funds.
(Market News India)
Mutual Fund News update from Nishit Doshi (9824021680) a leading MF Advisor based in Ahmedabad. Gujarat.
Friday, November 21, 2008
More Choice for Mutual Fund Investors
The competition for Indian mutual fund companies is likely to hot up. In addition to battling a weak market, Indian mutual fund companies have to deal with a influx of new players. Though the markets remain weak, there is no dearth of players seeking to have a pie of the Indian financial sector. Recently, the market regulator gave in-principle approval to seven players to set up mutual funds in India, including Edelweiss, Goldman Sachs and Indiabulls.
Yes, but it would be tough ride for the new comers. Though the Indian investors are more and more looking at equities through the MF route, the new comers will have a longer time to make profit, particularly when the growth rate of the industry is decelerating. According to Association of Mutual Fund Industry, a trade body,the growth in asset under management has fallen to 30 per cent in the first quarter of the fiscal, a sharp fallfrom the 50%-plus rates in the previous years.
The new players have to pay a higher distribution cost to push their products in a crowded industry. Besides, as the average fund size decreases, the new players will not have the scale to spread the cost. Have the new players not given these concerns a thought? Or, are they just following the crowd? It could be guessed that some new players would concentrate only on particular market niches. This would mean more choices for the retail investors and more specialized players to look at when looking at a particular asset class.
(Market News India)
Yes, but it would be tough ride for the new comers. Though the Indian investors are more and more looking at equities through the MF route, the new comers will have a longer time to make profit, particularly when the growth rate of the industry is decelerating. According to Association of Mutual Fund Industry, a trade body,the growth in asset under management has fallen to 30 per cent in the first quarter of the fiscal, a sharp fallfrom the 50%-plus rates in the previous years.
The new players have to pay a higher distribution cost to push their products in a crowded industry. Besides, as the average fund size decreases, the new players will not have the scale to spread the cost. Have the new players not given these concerns a thought? Or, are they just following the crowd? It could be guessed that some new players would concentrate only on particular market niches. This would mean more choices for the retail investors and more specialized players to look at when looking at a particular asset class.
(Market News India)
Aegon, Religare end mutual fund tieup
Mumbai: A month after getting the Securities and Exchange Board of India’s (Sebi’s) nod to launch an asset management company, Dutch financial services major Aegon and Religare Enterprises have decided to part ways.
A joint statement said that Aegon will assume control of Religare Aegon Mutual Fund, a 50:50 joint venture. Lotus India Mutual Fund, which was acquired by Religare Aegon two weeks ago, will be Religare’s asset management business in India.
Though the two partners have decided to end their relationship in the mutual fund venture, there will be no change in the shareholding of Aegon Religare Life Insurance at the moment. While Religare Enterprises holds a 44 per cent stake, Bennett, Coleman has 30 per cent and Aegon the balance 26 per cent.
Sources familiar with the development said that the two partners decided to part ways on the grounds that the recent acquisition of UK-based brokerage firm Hichens Harrison by Religare Capital Markets may result in a conflict with Aegon’s existing businesses in Europe.
According to sources, the recent Religare Aegon move to acquire the ailing asset management business of Lotus India Mutual Fund may have also contributed to the split. The deal was pushed by the Indian partner, and Aegon was kept out of the picture, they added.
The sources said Aegon felt that the acquisition of Lotus will hamper its plan to launch an offshore fund in India as Fullerton, the promoters of Lotus India Asset Management Company, already runs a Rs 85-crore offshore fund called Fullerton Sabre Lotus India fund.
Religare is promoted by Malvinder Singh and Shivinder Singh, the promoters of Ranbaxy who sold their stake in the pharmaceutical company to Daiichi Sankyo.
In 2006, Religare and Aegon formed a joint venture for asset management business in India. Around a month ago, the Securities & Exchange Board of India gave a licence to the asset management company. Religare Aegon currently awaits Sebi’s nod for three funds, which includes an equity fund, a liquid fund and a debt fund.
Through the Lotus acquisition, which is awaiting regulatory approval, Religare Aegon would have got access to six equity funds and a host of debt funds with combined assets under management of Rs 5,458 crore.
The fresh proposal is subject to regulatory approval.
The 100-odd Religare Aegon Mutual Fund employees are expected to be given the option to join either Aegon or continue with Religare for the funds acquired from Lotus. The top management, however, may not join Aegon.
Source: Business Standard
A joint statement said that Aegon will assume control of Religare Aegon Mutual Fund, a 50:50 joint venture. Lotus India Mutual Fund, which was acquired by Religare Aegon two weeks ago, will be Religare’s asset management business in India.
Though the two partners have decided to end their relationship in the mutual fund venture, there will be no change in the shareholding of Aegon Religare Life Insurance at the moment. While Religare Enterprises holds a 44 per cent stake, Bennett, Coleman has 30 per cent and Aegon the balance 26 per cent.
Sources familiar with the development said that the two partners decided to part ways on the grounds that the recent acquisition of UK-based brokerage firm Hichens Harrison by Religare Capital Markets may result in a conflict with Aegon’s existing businesses in Europe.
According to sources, the recent Religare Aegon move to acquire the ailing asset management business of Lotus India Mutual Fund may have also contributed to the split. The deal was pushed by the Indian partner, and Aegon was kept out of the picture, they added.
The sources said Aegon felt that the acquisition of Lotus will hamper its plan to launch an offshore fund in India as Fullerton, the promoters of Lotus India Asset Management Company, already runs a Rs 85-crore offshore fund called Fullerton Sabre Lotus India fund.
Religare is promoted by Malvinder Singh and Shivinder Singh, the promoters of Ranbaxy who sold their stake in the pharmaceutical company to Daiichi Sankyo.
In 2006, Religare and Aegon formed a joint venture for asset management business in India. Around a month ago, the Securities & Exchange Board of India gave a licence to the asset management company. Religare Aegon currently awaits Sebi’s nod for three funds, which includes an equity fund, a liquid fund and a debt fund.
Through the Lotus acquisition, which is awaiting regulatory approval, Religare Aegon would have got access to six equity funds and a host of debt funds with combined assets under management of Rs 5,458 crore.
The fresh proposal is subject to regulatory approval.
The 100-odd Religare Aegon Mutual Fund employees are expected to be given the option to join either Aegon or continue with Religare for the funds acquired from Lotus. The top management, however, may not join Aegon.
Source: Business Standard
Friday, November 14, 2008
Fidelity MF files paper for European Dynamic Growth Fund
Fidelity Mutual Fund (MF) has filed papers with Securities and Exchange Board Of India for Fidelity European Dynamic Growth Fund, an open ended fund of fund scheme.
Objective
Fidelity European Dynamic Growth Fund will invest primarily in Fidelity Funds -European Dynamic Growth (IND) Fund, an offshore fund launched by Fidelity Funds (an open ended investment company incorporated in Luxembourg) and similar to an Indian mutual fund scheme.
The investment objective of Fidelity Funds - European Dynamic Growth (IND) Fund is to aim to achieve long-term capital growth, principally through investment in an actively managed portfolio of companies that have their head office or exercise a predominant part of their activity in Europe.
What is Inside?
The scheme offers growth option and dividend option. The dividend option shall have payout and reinvestment facility.
The minimum application amount is Rs 5,000 and Rs 1,000 thereafter.
The scheme will offer for redemption/switch-out of units at monthly intervals at NAV based prices.
The scheme charges an entry load of 2.25% and a exit load of 1% if reedemed within 6 months from the date of allotment or Purchase.
Asset Allocation
The scheme aims at investing 80% to 100% in shares / units of the underlying scheme / foreign securities and 0% to 20% in money market instruments and / or liquid / cash schemes of mutual funds registered with SEBI.
Investment Strategy
The scheme will invest in the underlying scheme which in turn will invest principally in an actively managed portfolio of companies that have their head office or exercise a predominant part of their activity in Europe and the underlying scheme will typically have a bias towards medium sized companies with a market capitalisation of between Euro 1 and 10 billion.
Performance and Management
The performance of the scheme will be measured against MSCI Europe Index and the fund manager is Leng Ng.
(source:myiris)
Objective
Fidelity European Dynamic Growth Fund will invest primarily in Fidelity Funds -European Dynamic Growth (IND) Fund, an offshore fund launched by Fidelity Funds (an open ended investment company incorporated in Luxembourg) and similar to an Indian mutual fund scheme.
The investment objective of Fidelity Funds - European Dynamic Growth (IND) Fund is to aim to achieve long-term capital growth, principally through investment in an actively managed portfolio of companies that have their head office or exercise a predominant part of their activity in Europe.
What is Inside?
The scheme offers growth option and dividend option. The dividend option shall have payout and reinvestment facility.
The minimum application amount is Rs 5,000 and Rs 1,000 thereafter.
The scheme will offer for redemption/switch-out of units at monthly intervals at NAV based prices.
The scheme charges an entry load of 2.25% and a exit load of 1% if reedemed within 6 months from the date of allotment or Purchase.
Asset Allocation
The scheme aims at investing 80% to 100% in shares / units of the underlying scheme / foreign securities and 0% to 20% in money market instruments and / or liquid / cash schemes of mutual funds registered with SEBI.
Investment Strategy
The scheme will invest in the underlying scheme which in turn will invest principally in an actively managed portfolio of companies that have their head office or exercise a predominant part of their activity in Europe and the underlying scheme will typically have a bias towards medium sized companies with a market capitalisation of between Euro 1 and 10 billion.
Performance and Management
The performance of the scheme will be measured against MSCI Europe Index and the fund manager is Leng Ng.
(source:myiris)
Wednesday, October 15, 2008
RBI boosts liquidity for mutual funds
By Saikat Chatterjee and Surojit Gupta
MUMBAI/NEW DELHI (Reuters) - India pumped liquidity into its markets and took measures aimed at helping its $106 billion mutual-funds industry on Tuesday as its rupee and stocks rallied after governments worldwide moved to restore confidence in the financial sector.
Reserve Bank of India (RBI) governor said after meeting the finance minister in New Delhi the market situation was under control but he could not comment on what more measures might come.
India's financial markets were badly shaken last week as the global financial crisis spread, with stocks falling almost 16 percent, the rupee hitting a record low and overnight lending rates leaping to 23 percent.
The RBI cut the amount of funds banks must keep in reserve on Saturday, releasing more than $12 billion into the banking system, and on Tuesday it injected $13 billion via its daily overnight money market operations and introduced a temporary funding window for mutual funds.
"We have reviewed the entire situation and we believe everything is under control," RBI Governor Duvvuri Subbarao told reporters after meeting the finance minister, adding the liquidity situation was comfortable.
He later met the prime minister along with the finance minister but did not make comment further.
The RBI conducted a special 15-day repo auction on Tuesday to meet the liquidity needs of mutual funds, whose investors have pulled money out to pay tax bills and due to the global financial markets turmoil.
In the auction, which was to banks specifically for lending on to funds, saw only 35 billion rupees ($730 million) taken up against 200 billion rupees on offer.
"People did not have much time to participate at the auction and did not understand it completely and hence the low numbers," said Ashish Nigam, head of fixed income at Religare AEGON Asset Management Company.
The fund industry said the move was a welcome option, however. The central bank also relaxed rules for mutual funds on using illiquid certificates of deposit issued by banks, of which the funds have been big buyers this year, as collateral.
Mutual funds would normally sell bank debt on the money market to raise cash to meet redemptions.
But India's money markets have been hit by the global financial crisis, which has wrecked banks across the United States and Europe and made lenders around the world wary of dealing with each other.
Furthermore, redemptions rose in September when customers pulled a net 456.6 billion rupees out, much higher than a net outflow of just 90 million rupees in August, according to the Association of Mutual Funds of India (AMFI).
STOCKS, CURRENCY RALLY
Subbarao spoke after markets closed. But they mostly reacted positively to the steps, with the partially convertible rupee closing up 0.4 percent at 48.04/06 per dollar and the main share index ended up 1.5 percent, building on a 7.4 percent gain the previous session.
Overnight cash rates eased to 8.75/9.00 percent from Monday's 9.75/10.00 percent, straddling the central bank's main lending rate of 9.0 percent and indicating cash conditions were easing.
Finance Minister Palaniappan Chidambaram also welcomed the move.
"The chairman of the Indian Banking Association is in touch with the banks as well as the fund industry to decide on an appropriate rate at which banks will onlend to the funds," Chidambaram said in a statement.
Senior fund executives told Reuters on Sunday on condition of anonymity that mutual funds had asked the central bank to lend them short-term cash via a repurchase facility after the global financial crisis froze India's money markets.
India's mutual funds managed 4.8 trillion rupees of funds at end-September, the equivalent of about 10 percent of the country's gross domestic product, according to data from AMFI.
They also cornered 7.7 percent of household savings in 2007/08, according to the central bank.
(Additional reporting by Nishant Kumar in Singapore, V. Ramakrishnan in MUMBAI and Manoj Kumar in NEW DELHI)
(yahoo india news)
MUMBAI/NEW DELHI (Reuters) - India pumped liquidity into its markets and took measures aimed at helping its $106 billion mutual-funds industry on Tuesday as its rupee and stocks rallied after governments worldwide moved to restore confidence in the financial sector.
Reserve Bank of India (RBI) governor said after meeting the finance minister in New Delhi the market situation was under control but he could not comment on what more measures might come.
India's financial markets were badly shaken last week as the global financial crisis spread, with stocks falling almost 16 percent, the rupee hitting a record low and overnight lending rates leaping to 23 percent.
The RBI cut the amount of funds banks must keep in reserve on Saturday, releasing more than $12 billion into the banking system, and on Tuesday it injected $13 billion via its daily overnight money market operations and introduced a temporary funding window for mutual funds.
"We have reviewed the entire situation and we believe everything is under control," RBI Governor Duvvuri Subbarao told reporters after meeting the finance minister, adding the liquidity situation was comfortable.
He later met the prime minister along with the finance minister but did not make comment further.
The RBI conducted a special 15-day repo auction on Tuesday to meet the liquidity needs of mutual funds, whose investors have pulled money out to pay tax bills and due to the global financial markets turmoil.
In the auction, which was to banks specifically for lending on to funds, saw only 35 billion rupees ($730 million) taken up against 200 billion rupees on offer.
"People did not have much time to participate at the auction and did not understand it completely and hence the low numbers," said Ashish Nigam, head of fixed income at Religare AEGON Asset Management Company.
The fund industry said the move was a welcome option, however. The central bank also relaxed rules for mutual funds on using illiquid certificates of deposit issued by banks, of which the funds have been big buyers this year, as collateral.
Mutual funds would normally sell bank debt on the money market to raise cash to meet redemptions.
But India's money markets have been hit by the global financial crisis, which has wrecked banks across the United States and Europe and made lenders around the world wary of dealing with each other.
Furthermore, redemptions rose in September when customers pulled a net 456.6 billion rupees out, much higher than a net outflow of just 90 million rupees in August, according to the Association of Mutual Funds of India (AMFI).
STOCKS, CURRENCY RALLY
Subbarao spoke after markets closed. But they mostly reacted positively to the steps, with the partially convertible rupee closing up 0.4 percent at 48.04/06 per dollar and the main share index ended up 1.5 percent, building on a 7.4 percent gain the previous session.
Overnight cash rates eased to 8.75/9.00 percent from Monday's 9.75/10.00 percent, straddling the central bank's main lending rate of 9.0 percent and indicating cash conditions were easing.
Finance Minister Palaniappan Chidambaram also welcomed the move.
"The chairman of the Indian Banking Association is in touch with the banks as well as the fund industry to decide on an appropriate rate at which banks will onlend to the funds," Chidambaram said in a statement.
Senior fund executives told Reuters on Sunday on condition of anonymity that mutual funds had asked the central bank to lend them short-term cash via a repurchase facility after the global financial crisis froze India's money markets.
India's mutual funds managed 4.8 trillion rupees of funds at end-September, the equivalent of about 10 percent of the country's gross domestic product, according to data from AMFI.
They also cornered 7.7 percent of household savings in 2007/08, according to the central bank.
(Additional reporting by Nishant Kumar in Singapore, V. Ramakrishnan in MUMBAI and Manoj Kumar in NEW DELHI)
(yahoo india news)
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