MUMBAI: Capital market regulator SEBI plans to frame regulations for mutual fund distributors in a manner that the onus will be on trustees of ass
et management companies to ensure that norms are enforced. SEBI has taken this view since the trustees are the first level regulators of the industry at the fund level.
SEBI has already held one round of meeting with mutual fund trustees on this issue. Another meeting is likely to be held shortly to discuss this issue further.
“It is high time distributors are regulated, it has been one of our major concerns for sometime,” said a SEBI official, who was present at the meeting.
“The AMCs are regulated..but then the distributors who are violating all code of conducts are not regulated,” he added.
At present, there are no regulations for the distribution industry. However, distributors of financial products have to pass the AMFI or the IRDA exam and get themselves registered in order to sell any financial product. As per industry estimates, there are more than 45,000 mutual fund distributors in the country.
As part of its efforts to safeguard the interest of retail investors, SEBI had ruled that new schemes launched by mutual funds should be called New Fund Offerings (NFOs) and not initial public offerings (IPOs), which seemed to suggest an offering of shares rather than a mutual fund scheme.
The regulator had also changed the fee structure and accounting norms of the industry so that retail investors were not shortchanged.
“We may have to frame a new code of conduct on compliance for distributors,” the SEBI official said.
Financial sector regulators are aware of the fact that there has always been mis-selling of financial products such as mutual funds, insurance, equities, fixed income and deposits happening in the country. In recent times, the situation has been exacerbated, due to the boom in financial markets.
In other developed markets such as in the US, the Securities Exchange Commission (SEC) doesn’t regulate distributors but the NASD (National Association of Securities Dealers), which is a SRO (self-regulatory organisation) does. In India, the tradition of a SRO is yet to evolve. SEBI has held discussions in the past with trade bodies in the country to become a SRO, which is next on its agenda.
According to sources, SEBI will be initiating dialogues with IRDA and RBI officials on strengthening this mechanism as there is a need for co-ordination between financial sector regulators. Market players say 30% of the mutual fund distribution is done by banks, which comes under RBI’s jurisdiction.
A case in point is the recent issue on mutual funds offering insurance cover, which SEBI took up with the government and IRDA as it was felt that the Life Insurance Council had taken a unilateral decision on it.
(Source: Economic Times)
Mutual Fund News update from Nishit Doshi (9824021680) a leading MF Advisor based in Ahmedabad. Gujarat.
Friday, October 3, 2008
Dividend yield funds perform better than Sensex, Nifty
MUMBAI: As the market brings in fall in share prices, returns and sentiments, there are funds that haven't much borne the brunt of the massive dip. These are dividend yield funds.
At a time when the Sensex has fallen to more than 27 per cent in one year, these funds have fallen not more than 21 per cent on an average.
Says Manish Bhandari, fund manager, ING Dividend Yield Fund, "The foremost strategy that has worked for dividend yield funds is selecting stock and constructing portfolio of stocks having dividend yield of more than Nifty, and being true to the mandate of investing in dividend yield stocks only."
Of all the six funds having exposure to dividend yield stocks, ING Dividend Yield Fund has emerged as the less-destroyed fund in terms of returns, with only 15 per cent fall in its returns for one-year period.
Adds Bhandari of ING Dividend Yield Fund, "Our value-investing approach in stock selection has helped us to deliver superior returns, which have beaten the index by more than 10% in one-year time frame. We wouldn't invest in momentum or high P/E stocks."
(Source:Economic times)
At a time when the Sensex has fallen to more than 27 per cent in one year, these funds have fallen not more than 21 per cent on an average.
Says Manish Bhandari, fund manager, ING Dividend Yield Fund, "The foremost strategy that has worked for dividend yield funds is selecting stock and constructing portfolio of stocks having dividend yield of more than Nifty, and being true to the mandate of investing in dividend yield stocks only."
Of all the six funds having exposure to dividend yield stocks, ING Dividend Yield Fund has emerged as the less-destroyed fund in terms of returns, with only 15 per cent fall in its returns for one-year period.
Adds Bhandari of ING Dividend Yield Fund, "Our value-investing approach in stock selection has helped us to deliver superior returns, which have beaten the index by more than 10% in one-year time frame. We wouldn't invest in momentum or high P/E stocks."
(Source:Economic times)
Mutual funds assets fall 3 pc in Sept
NEW DELHI: The mutual fund industry witnessed nearly 3 per cent drop in its assets under management in September, led by country's top fund house
Reliance MF, which lost over Rs 2,122 crore during the period.
The combined average assets under management (AUM) of the 35 fund houses in the country dropped to Rs 5,29,121.76 crore at the end of September, compared with Rs 5,44,173.96 crore in August, according to the data released by the Association of Mutual Funds in India.
Analysts believe the bearish sentiment in the market and the credit crisis in the global market have taken a toll on the assets of mutual funds, even as investors have turned their attention fixed maturity plans and liquid schemes.
Reliance MF registered the biggest drop of over Rs 2,122 crore or 2.39 per cent in its average AUM in September. However, Reliance MF continues to be the top fund house with assets valued Rs 86,494.46 crore at the end of the month.
Further, HDFC MF, which tripped ICICI Prudential MF to grab the second notch last month, retained the ranking with an AUM of Rs 51,998.28 crore, while ICICI's AUM fell 6.25 per cent to Rs 49,772.48 crore.
While HDFC MF's AUM declined from Rs 53,858.63 crore, ICICI Prudential MF's assets dropped from Rs 53,092.78 crore.
UTI MF continued its fall in the average AUM, which was Rs 44,623.18 crore at the end of September, down 5 per cent from August's figure of Rs 46,947.32 crore.
Besides, AUM of Franklin Templeton MF rose marginally to Rs 28,356 crore in September, against Rs 27,715.32 crore in the previous month.
Meanwhile, about 11 fund houses managed to increase their AUM in September which include -- ABN Amro MF, Taurus MF, Sahara MF, Deutsche MF, Benchmark among others.
(Source:Economic times)
Reliance MF, which lost over Rs 2,122 crore during the period.
The combined average assets under management (AUM) of the 35 fund houses in the country dropped to Rs 5,29,121.76 crore at the end of September, compared with Rs 5,44,173.96 crore in August, according to the data released by the Association of Mutual Funds in India.
Analysts believe the bearish sentiment in the market and the credit crisis in the global market have taken a toll on the assets of mutual funds, even as investors have turned their attention fixed maturity plans and liquid schemes.
Reliance MF registered the biggest drop of over Rs 2,122 crore or 2.39 per cent in its average AUM in September. However, Reliance MF continues to be the top fund house with assets valued Rs 86,494.46 crore at the end of the month.
Further, HDFC MF, which tripped ICICI Prudential MF to grab the second notch last month, retained the ranking with an AUM of Rs 51,998.28 crore, while ICICI's AUM fell 6.25 per cent to Rs 49,772.48 crore.
While HDFC MF's AUM declined from Rs 53,858.63 crore, ICICI Prudential MF's assets dropped from Rs 53,092.78 crore.
UTI MF continued its fall in the average AUM, which was Rs 44,623.18 crore at the end of September, down 5 per cent from August's figure of Rs 46,947.32 crore.
Besides, AUM of Franklin Templeton MF rose marginally to Rs 28,356 crore in September, against Rs 27,715.32 crore in the previous month.
Meanwhile, about 11 fund houses managed to increase their AUM in September which include -- ABN Amro MF, Taurus MF, Sahara MF, Deutsche MF, Benchmark among others.
(Source:Economic times)
Thursday, October 2, 2008
Bank of India joins Mutual Fund league
The bank would hold a majority stake in the proposed subsidiary and has appointed Ernst & Young as consultant to facilitate the process
Mumbai: Leading public sector lender, Bank of India (BoI), is set to enter the mutual funds business and is mulling setting up a separate subsidiary for the business.
The bank would hold a majority stake in the proposed subsidiary and has appointed Ernst & Young as consultant to facilitate the process, a senior BOI official said.
The mutual funds partner is expected to be finalised from a clutch of leading global players by October, the official said.
"We will shortlist around nine to ten players from a list of around 20 leading players to establish a JV partnership. This process would be completed within the next 10-15 days and the final partner chosen in about two months," the official told PTI here.
Last month, BoI had invited Expressions of Interest (EoIs) from consultants for its MF business and has now zeroed in on Ernst & Young from among four to five aspirants, the official said.
The consultant would assist the bank in formulating its business strategies including identifying a 'suitable' partner, the official said.
Though the official declined to divulge the names of the foreign players BoI is in talks with, Spanish mutual funds major, BBVA, is understood to be in talks with the bank. Officials from BBVA declined to comment on the matter.
After finalising its partner, BoI would approach the Reserve Bank of India for the necessary regulatory approvals, the official said. Meanwhile, the life insurance joint venture of Bank of India, Union Bank of India and Japanese firm Dai-ichi, in which BoI holds a 51 per cent stake, is expected to get operational by Q3 FY 09, officials from the banks said. The JV--Star Union Dai-ichi Life Insurance--will use its combined branch strength of nearly 5,000 for the distribution of insurance products. The JV will also utilise its trained staff to sell the insurance products.
Several state-owned lenders including State Bank and Bank of Baroda are already active in the mutual funds space, either through their wholly-owned subsidiaries or joint venture tie-ups with foreign companies.
State Bank has tied-up with French major, Societe Generale Asset Management, which manages over USD 500 billion assets worldwide.
Similarly, Canara Bank has entered into a JV with Netherlands-based Robeco Groep NV. Robeco had acquired a 49 per cent stake in Canbank Investment Management Services last year. As on July 31, the JV has total assets under management of Rs 4,532.6 crore.
Union Bank of India is also readying itself to roll-out mutual funds in the next three to six months. The bank recently entered into an agreement with Belgium-based KBC Asset Management NV. UBI holds a 51 per cent stake in the company while KBC the balance 49 per cent.
© Copyright 2008 PTI. All rights reserved.
(source:MSN)
Mumbai: Leading public sector lender, Bank of India (BoI), is set to enter the mutual funds business and is mulling setting up a separate subsidiary for the business.
The bank would hold a majority stake in the proposed subsidiary and has appointed Ernst & Young as consultant to facilitate the process, a senior BOI official said.
The mutual funds partner is expected to be finalised from a clutch of leading global players by October, the official said.
"We will shortlist around nine to ten players from a list of around 20 leading players to establish a JV partnership. This process would be completed within the next 10-15 days and the final partner chosen in about two months," the official told PTI here.
Last month, BoI had invited Expressions of Interest (EoIs) from consultants for its MF business and has now zeroed in on Ernst & Young from among four to five aspirants, the official said.
The consultant would assist the bank in formulating its business strategies including identifying a 'suitable' partner, the official said.
Though the official declined to divulge the names of the foreign players BoI is in talks with, Spanish mutual funds major, BBVA, is understood to be in talks with the bank. Officials from BBVA declined to comment on the matter.
After finalising its partner, BoI would approach the Reserve Bank of India for the necessary regulatory approvals, the official said. Meanwhile, the life insurance joint venture of Bank of India, Union Bank of India and Japanese firm Dai-ichi, in which BoI holds a 51 per cent stake, is expected to get operational by Q3 FY 09, officials from the banks said. The JV--Star Union Dai-ichi Life Insurance--will use its combined branch strength of nearly 5,000 for the distribution of insurance products. The JV will also utilise its trained staff to sell the insurance products.
Several state-owned lenders including State Bank and Bank of Baroda are already active in the mutual funds space, either through their wholly-owned subsidiaries or joint venture tie-ups with foreign companies.
State Bank has tied-up with French major, Societe Generale Asset Management, which manages over USD 500 billion assets worldwide.
Similarly, Canara Bank has entered into a JV with Netherlands-based Robeco Groep NV. Robeco had acquired a 49 per cent stake in Canbank Investment Management Services last year. As on July 31, the JV has total assets under management of Rs 4,532.6 crore.
Union Bank of India is also readying itself to roll-out mutual funds in the next three to six months. The bank recently entered into an agreement with Belgium-based KBC Asset Management NV. UBI holds a 51 per cent stake in the company while KBC the balance 49 per cent.
© Copyright 2008 PTI. All rights reserved.
(source:MSN)
Mutual fund sector to grow at 30-35 percent
Kolkata: The mutual fund sector will see a compounded annual growth rate of 30-35 percent in the next three to five years, an official said Monday.
"The mutual fund sector will see a huge growth in the coming three to five years to the tune of 30 to 35 percent. This will happen due to easing of regulations on mutual funds," Birla Sun Life Asset Management Company (BSLAMC) Chief Executive Officer Anil Kumar told reporters here.
He said the company grew at 89 percent last fiscal compared to an industry growth of 60 percent.
Kumar, who was present at the launch of his company's first commodity fund, said BSLAMC grew at 14 percent in the first quarter of the current fiscal against an industry growth rate of six percent.
The company plans to almost double its offices to 200 by the end of this fiscal. Currently, BSLAMC has 110 offices in the country, he added.
Christened Birla Sun Life Commodity Equity Fund, the new product is an open-ended commodity equities fund meant to offer investors long-term capital growth by investing in securities of domestic and overseas commodity companies.
"We see commodities and investments to commodity equities as essential and not an alternate investment class. Commodity is the second largest asset class in terms of investments after foreign currency," Kumar said. Investments to the commodity equity fund can be done in sectors like metals, agriculture and multi-commodities.
Source: Indo-Asian News Service
"The mutual fund sector will see a huge growth in the coming three to five years to the tune of 30 to 35 percent. This will happen due to easing of regulations on mutual funds," Birla Sun Life Asset Management Company (BSLAMC) Chief Executive Officer Anil Kumar told reporters here.
He said the company grew at 89 percent last fiscal compared to an industry growth of 60 percent.
Kumar, who was present at the launch of his company's first commodity fund, said BSLAMC grew at 14 percent in the first quarter of the current fiscal against an industry growth rate of six percent.
The company plans to almost double its offices to 200 by the end of this fiscal. Currently, BSLAMC has 110 offices in the country, he added.
Christened Birla Sun Life Commodity Equity Fund, the new product is an open-ended commodity equities fund meant to offer investors long-term capital growth by investing in securities of domestic and overseas commodity companies.
"We see commodities and investments to commodity equities as essential and not an alternate investment class. Commodity is the second largest asset class in terms of investments after foreign currency," Kumar said. Investments to the commodity equity fund can be done in sectors like metals, agriculture and multi-commodities.
Source: Indo-Asian News Service
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