Peerless may launch mutual fund next year

The Kolkata-based residuary non-banking finance firm Peerless General Finance and Investment Co is likely to launch its own mutual fund next year, a
senior company official said here Tuesday.
'We have got in-principle approval from SEBI (Securities and Exchange Board of India) and within the next six months we hope to get the final approval. We are going to launch the fund next year,' Peerless director of financial products distribution Jayanta Roy told reporters.
The company has been planning to launch a mutual fund for quite some time.
Meanwhile, Peerless signed a pact with private sector insurer Max New York Life Monday for distribution of Max Vijay insurance cum savings policies.
Max New York has targeted sales of over 500,000 such policies in one year through the Peerless network.
'We have so far sold 20,000 policies,' said Max New York chief executive officer and managing director Rajesh Sud.

Source: http://news.smashits.com/377991/Peerless-may-launch-mutual-fund-next-year.htm

Economy may recover by Sept: ICICI Prudential

Offering atleast three pre-requisites, Nilesh Shah, deputy managing director of ICICI Prudential Asset Management Company said the economy may recover by September this year.

According to Shah, if the next few months witness a good monsoon, capital flows from abroad and further rate cuts by RBI, Indian economy may come out of the current slowdown.
Shah, who was in the city to launch 'ICICI Prudential Target Returns Fund', an open ended diversified equity fund, further said that the country may witness negative inflation between May and September.
"What we may see will not deflation but negative inflation for a short time. The economy may witness negative inflation between May and September," he said.
The AMC's Target Return Fund seeks to generate capital appreciation by investing predominantly in equity shares of the large market capitalization companies constituting the BSE 100 index.
The scheme will have pre-determined triggers set for investors based on their risk appetite, which provides investors with an option to automatically switch the appreciation or entire investment with appreciation to pre-selected debt schemes of ICICI Prudential Mutual Fund.
The entry load for the scheme is 2.25 per cent for investments of less than Rs 2 crore under the retail option, while it is nil in the case of institutional investments. The subscription for the scheme will close on May 14, 2009. The assets under management of the ICICI Prudential mutual fund as of March 2009 were Rs 51,432 crore against Rs 54,321 crore in the same month previous year.

Source: http://www.business-standard.com/india/news/economy-may-recover-by-sept-icici-prudential/356294/

India-fund flows turn positive

Global investors are warming up to India, it appears from the fact that money has started flowing into India dedicated funds after the local markets gained close to 40% in a global rally.
These funds saw inflows of around Rs 500 crore in the week ended April 22 and a little over Rs 1,000 crore over the past four weeks, Citigroup analysts Elaine Chu and Markus Rosgen wrote in a report.
Inflows for the year were marginally negative by around Rs 10 crore until the latest inflows. Following the inflows, however, cumulative inflows have turned positive at around Rs 490 crore.
The same week (to April 22) last year had seen outflows of Rs 4,000 crore.
The Sensex has gained 3211 points since the beginning of the rally.
From the beginning of the year till March 9, after which the rally began, FIIs sold Indian equities worth Rs 9,000 crore.
Since March 9, they have invested Rs 8,000 crore in the Indian markets.
Experts, however, aren't celebrating just yet. While it is true that investors have allotted money for India, when and how it comes into India would depend on the new government at the Centre, the banking system in the US and economic numbers, they say.
The fiscal position and the general elections are still a cause for concern.
However, the outlook may be improving.
"While the first worry is justified, we believe the risk of an anti-market government emerging is very low. An attractive prospective PE of 11.4x suggests India could rebound once the election is out of the way," HSBC analysts John Lomax, Wietse Nijenhuis and Anupama Rao said in a report.
The Indian economy was likely to rebound with growth returning in the second quarter of FY10 and real GDP growth for CY09 could come in at 6.2%, the HSBC analysts said. "We expect earnings growth of 5-10% this year too, whereas the consensus has already been cut to 4%."
Jagannadham Thunuguntla, equity head at SMC Global Securities feels India's attractiveness as an investment destination would depend on the outcome of the elections. "There would be a bit of herd mentality as far as foreign money is concerned. Once the initial flow begins, then a lot more can follow. Right now, FIIs would be looking to a stable government for cues. If there is sufficient flexibility for the government to act, then one can expect foreign money to chase India," he said.
Ajay Argal, co-head, equity investments at Birla Sun Life Mutual Fund agrees that most FIIs would be playing a waiting game as far as the elections are concerned. But they would also watch the health of the financial system in the US and data in India. "The first week of May will reveal how well banks are holding up to stress tests and that will have an impact on the financial sector and global sentiment. In India, FIIs would be watching for numbers like industrial production," he said.

Source: http://www.dnaindia.com/report.asp?newsid=1251072

UTI mutual funds to merge equity schemes

UTI Asset Management Company (UTI AMC), one of the largest fund houses in the country, is planning a mega merger of the equity schemes in its portfolio. The process is likely to be kicked off in the current financial year.
Speaking to TOI, UTI MF chairman & MD U K Sinha said the organisation currently had too many equity schemes, which would be pruned by over 50%. Currently, the fund house has 96 schemes, of which equity schemes number 29.
The number of equity schemes is likely to be brought down to 10 through mergers over a period of time. Sinha said too many schemes in the market only proved that the Indian mutual fund industry still remained immature.
“Here, investors prefer new fund offerings than an existing fund. But it is just the opposite in matured markets. One should understand that the possibility of higher returns is much more in existing schemes. NFOs are more of a marketing strategy. But as all fund houses are doing that, we, too, have to come out with NFOs,” he added.
Sinha said that during the last financial year, it had merged nine schemes into three. This year, it would consolidate four schemes into two. Commenting on balanced schemes, he said that UTI has a very good bouquet of balance funds. “We have now also introduced systematic investment facility under ULIP. There is no plan to change the number or add any new scheme in this space,” he added.
Sinha said the number of fixed maturity plans (FMP) at 35 is also quite high. But he added that it is not possible to prune FMPs. “FMPs have a different maturity period and so it is not possible to merge them,” he added.
He said demand for corporate bonds is very high as banks are still very cautious about lending. “UTI has lend over Rs 5,000 crore in last couple of months. The figure for the MF industry, as a whole, is Rs 35,000 crore,” he added.
Meanwhile, UTI AMC has tied up with Coopers Wealth Creators and Tower Infotech for providing investment opportunities through micro pension initiative under UTI Retirement Benefit Pension Fund to employees and business associates of Tower Infotech.
Senior V-P and regional head (east) of UTI AMC, T K Maji, said the micro pension initiative is aimed at providing social security cover to private and unorganised sectors.

Source: http://economictimes.indiatimes.com/Personal-Finance/Mutual-Funds/UTI-mutual-funds-to-merge-equity-schemes/articleshow/4457379.cms

Is it the right time to invest in gold schemes?

In times of turbulence, when equity seems to have lost out in race, fund houses have begun to cash in on the interest generated by the yellow metal. Gold has gained over 57% in the last two years. But, the moot question is: does it make sense to invest in the metal at current levels?
Fund managers and investors have been the beneficiaries of the spike in gold prices in last two years and both gold exchange traded funds (ETFs) and world gold funds (WGFs) have become highly popular among investors these days.
Gold ETFs are mutual funds that invest directly in pure gold while WGFs invest in equities of gold mining companies across the globe. Both these categories of mutual fund schemes have generated handsome returns for the investors, though WGFs have been affected by the stock market meltdown.
Gold ETFs, whose returns are directly linked to the gold price, have generated over 20% returns in last one year. The spectacular show by this category has resulted in healthy inflows into these schemes. Since January 2008, the assets (AUM) of gold ETFs has surged by about 59% to Rs 756 crore by the end of March this year.
Currently five fund houses offer gold ETFs in India, but more are gearing up to join the group. Recently SBI Magnum joined the bandwagon of Benchmark, UTI, Reliance, Kotak and Quantum, who currently offer gold ETFs. Interestingly, Kotak AMC now plans to launch another gold fund. According to its offer document filed with Sebi, the new gold fund would be a feeder fund that would invest in existing gold ETFs.
WGFs have also put up a decent show in the last six months. These are however feeder funds and thus not actively managed in India. Both AIG and DSP Blackrock, the only two fund houses currently to have WGFs, manage these funds through their internationally based parent gold fund.
While the equity meltdown did impact WGFs, especially in the first half of the last fiscal, the sensational rise in the gold prices did benefit the stocks of gold mining companies where WGFs usually invest. Both the WGFs have thus reported more than 50% rise in returns over the last six months, which is even higher than the rise in gold prices.
Encouraged by the rising price of the gold, fund houses are now devising plans to diversify portfolios to incorporate the yellow metal . While UTI has launched a wealth builder fund that invests in equity, debt and gold ETFs, Sundaram BNP Paribas is also planning to launch a scheme on similar lines whose offer document has been filed with Sebi. Investors can now thus look forward to many more options to invest in gold.
But is it the right time to invest in gold schemes?
Recently a brief rally in equity markets resulted in the fall in gold prices from $967 an ounce to $865 in just two weeks. If the equity rally continues for some more time, gold prices may see further downside and may see the the range of $840- $800.
Historically too, the April-September period has been a subdued one for gold. However, if gold manages to close above $915- $920 in the coming days, the metal could rise to around $1000 by the second half of the current year.Nevertheless, gold’s outstanding performance last year continues to makes it one of the most preferred investment avenue for several investors.

Source: http://economictimes.indiatimes.com/Investors-Guide/Is-it-the-right-time-to-invest-in-gold-schemes/articleshow/4452961.cms