MFs chalk out new strategies to rope in more investors

The fate of mutual fund industry, after it witnessed a paradigm shift in the distribution model, lies in the hands of the investor. Industry experts believe that the value proposition in products, offerings and advisory will determine as to who will survive the battle. CNBC-TV18’s Priyal Guliani reports.
Apart from grappling with falling markets due to global crisis, the Indian mutual fund industry is going through a transition due to regulatory changes. After initial resistance with regard to changes in the charge structure and distribution model, it is now busy creating value for investors to rope them in.

Ajay Srinivasan, Chief Executive Officer, Aditya Birla Financial, says, “Change in regulation has meant that distribution needs to change in itself. What it means is that commission cannot be there in the product. It clearly means that you need to show value. Some distributors have made the shift, while some are finding it difficult. But over a period of time this is how it is going to be.”
Fund houses bringing in new offerings in the market also believe, products offering unique proposition combined with awareness will change the tide.
Ashu Suyash, Country Head and Managing Director, Fidelity India, says, “All the upheaval concerning entry load notwithstanding, I believe there is sufficient interest. It is about continuously building their awareness levels.”But experts say with retail participation being lacklustre in the last couple of months and change in business models, the mutual fund industry will witness the survival of the fittest.

Source: http://www.moneycontrol.com/news/cnbc-tv18-analysis/mfs-chalk-out-new-strategies-to-ropemore-investors_425422.html

‘No consensus on longer market hours’

There is no consensus among market participants on extension of market hours, something recently permitted by Securities and Exchange Board of India, said Mr Ravi Narain, Managing Director of NSE, here today.
“We would love the market to build consensus on what makes sense for them, and we will respond. Some segments of the market are interested in longer hours but the majority of the market seems to be interested in retaining the hours as they are,” Mr Narain said on the sidelines of the Indian Securities Forum here.
“The systems at the exchanges are not a problem, the real concern is the facility to transfer money and margins within the banking system from upcountry.
The second concern is the back-office system, especially of the smaller brokers,” he added.Faster listing

One year from now, Indian companies may be able to list within seven days of closure of their IPOs.
The market regulator plans to reduce the closure-to-listing time from 20 to seven days, as a longer time span makes it too risky for the issuer and the investor, said the SEBI Chairman, Mr C. B. Bhave.
“We are planning on implementing this over the next one year,” he said.
SEBI is also working on extending the Applications Supported by Blocked Amount (ASBA) facility available to institutional investors, Mr Bhave said.
About 25 per cent of retail applications for IPOs come through ASBA, he said.
The stock market regulator might also reduce the cost of mutual fund transactions and tighten regulations for portfolio management.

Source: http://www.thehindubusinessline.com/2009/11/19/stories/2009111952460100.htm

DSP BlackRock Mutual Fund launches DSP BlackRock World Mining Fund

The New Fund Offer (NFO) will commence on November 23, 2009 and close on December 18, 2009.


DSP BlackRock Investment Managers today announced the launch of DSP BlackRock World Mining Fund. The scheme is a fund of funds Scheme investing predominantly into the BlackRock Global Funds (BGF) – World Mining Fund (WMF) which invests in equity securities of mining companies globally. These companies generally operate across various geographies and enjoy considerable pricing flexibility. The New Fund Offer (NFO) will commence on November 23, 2009 and close on December 18, 2009.

Unique Features
DSP BlackRock World Mining Fund provides Indian investors with a unique investment opportunity to benefit from potential growth prospects in the mining sector by investing into mining companies globally

The unique features of this product are:

Provides access to BGF–WMF, one of the largest funds in its category in the world, with a long term performance track record
BGF World Mining Fund is highly regarded and rated by independent agencies.
The scheme provides investors the opportunity for global diversification combined with access to fundamentals of the mining sector and the growth potential of equities
The team responsible for BGF-WMF is one of the stronger Natural Resources Teams in the industry, managing around US$ 31.9 billion in assets as on Oct 30, 2009. Four of the team’s five portfolio managers are geologists/geophysicists – a definite advantage for successful investing in this sector. The core of the team has worked together for over ten years, which has enabled them to build up invaluable experience with regards to the gold, mining and Mining resources industry.

Areas into which this scheme invests
DSP BlackRock World Mining Fund will invest into the BGF-WMF and other similar overseas mutual fund schemes, and will provide investors with access to the fundamentals of the mining sector.

BGF - World Mining Fund invests mostly in the equity securities of mining and metals companies whose predominant economic activity is the production of base metals and industrial minerals such as iron ore and coal. The scheme may also hold the equity securities of companies whose predominant economic activity is in gold or other precious metals or mineral mining.

Key drivers in the Mining sector
The global mining and metals sector is faced with the challenge of responding to the rising demand for resources. While deposits are becoming scarcer and harder to locate, new production is being limited by supply chain bottlenecks and skills shortages.

Current outlook on the Mining Sector
The first half of 2009 saw China aggressively restocking. This drove up the demand for commodities in the first half of the year and caused commodity prices to rise significantly from the lows seen in late 2008. For example, by the end of June 2009, copper had risen 92% from its low. We are yet to see evidence of a material restocking cycle in the US or Europe but once signs of sustainable economic recovery emerge, restocking in these regions should also be supportive for commodity prices.

Despite a supposed slowdown in industrial demand, there were record levels of imports for copper, iron ore and coking into China during the first half of 2009.

We have also seen signs of economic recovery in the Western World with some restocking seen in selected areas e.g. steel, but the full effect is yet to be felt, in our opinion

As we look forward to 2010, it is likely that the impact of stimulus spending on infrastructure projects should begin to come through into the market, as well as a potential recovery in private sector demand. If demand does recover then the supply side is unlikely to be able to respond to the same extent.

The credit crisis has resulted in widespread production cutbacks across most metals. Some of this capacity has been taken offline permanently and the remainder will not be able to be brought back online instantaneously. In addition, a large number of planned expansion projects have been shelved as appetite for taking on development risk has diminished and the ability to finance the projects has reduced.

Such constraints on the supply side lead us to believe that a demand recovery could provide a constructive environment for commodity prices, which are the key earnings driver for mining companies.

Why Invest DSP BlackRock World Mining Fund?

As mentioned earlier, DSP BlackRock World Mining Fund will invest predominantly into the BGF-WMF (Fund). This Fund has a strong long-term performance track record – The Fund is ranked no. 1 in its sector over 5 years, 10 years and since launch and has produced impressive cumulative returns ahead of benchmark over the long term.

Regional and sub-sector diversification – By investing in DSP BlackRock World Mining Fund, which will invest into the BGF-WMF, Indian investors will have the opportunity to diversify investments away from country based asset allocation strategies and gain exposure to sectors of the market which tend to outperform at various phases of the business cycle.

Experienced Team – The Team is one of the industry’s acknowledged specialists, with extensive industry contacts and significant research capabilities, managing US$31.9 bn (As on Oct 30, 2009)* in assets on behalf of clients. The latest August 2009 Standard & Poor’s report refers to the Fund as being “Managed by BlackRock’s expert natural resources team”.

In-depth research process – the managers really apply a kick-the-tyres approach to the companies in which they invest. It is only by meeting with company management, attendance at industry events and research trips to company assets, as well as extensive commodity and equity analysis that the stock-specific risks within the portfolio can be evaluated fully.

The Fund has been awarded the maximum AAA ratings from both Standard & Poor’s and OBSR. The Fund was also awarded an “ELITE” Morningstar Rating in July 2009. The fund achieved “24 1st place awards” for performance excellence worldwide in 2008 from a number of recognised ratings agencies and publications.

The Fund strategy
The Fund’s endeavour to incorporate the ‘best ideas’ in the portfolio instead of just following a benchmark driven approach. The wide experience of the portfolio managers as well as their sector perspective of companies across the globe help them ensure that the best global ideas are reflected in the portfolio. The Fund focuses on a bottom-up approach to portfolio construction coupled with a top-down sub-sector overlay.

Speaking to the media, Mr. S. Naganath, President and Chief Investment Officer said, “DSP BlackRock World Mining Fund provides investors with an opportunity to diversify their portfolio and access the potential growth prospects of the global mining sector”

Source: http://www.indiainfoline.com/Markets/News/News.aspx?NewsId=15032