Rel MF: turning distributors into financial advisers

To encourage distributors and empower them to offer advisory and be able to charge fee from investors, the country’s largest mutual fund player Reliance Mutual Fund has taken an initiative to help distributors become financial advisers through a certified financial planner (CFP) certification.

Reliance Mutual Fund has negotiated with the Financial Planning Standards Board (FPSB) to charge a significantly lower fee from distributors for the CFP certification programme.

The CFP programme along with its five levels of examination will cost a minimum Rs 23, 000.

The fund house will also refund the fee to distributors who clear the examination.

As of now, most distributors are product providers. “The biggest challenge now is how distributors charge fees and for that we want to turn them into financial advisers,” said said Sundeep Sikka, chief executive officer, Reliance Mutual Fund.

“We have negotiated a discounted fee for distributors, to encourage them to join the CFP programme and start working like advisers,” said Sikka.

“We have offered this to all our 40,000 distributors and 6,000 of them have already shown interest.” The fund house has rolled out this initiative in 20 cities and will take it to over 50 cities in the next year.

Ever since the mutual fund industry entered the regulatory regime of no-entry load, distributors have been crying foul.

While banks offering mutual fund products do charge an advisery fee from investors, distributors find themselves constrained. The industry has also seen distributors move towards selling Unit-Linked Insurance Policy.

“Since investor need will drive mutual funds, its merits like being cheap and tax efficient, will be strong pull factors,” said Sikka.


Source:http://www.hindustantimes.com/business-news/businessbankinginsurance/Rel-MF-turning-distributors-into-financial-advisers/Article1-524373.aspx

UBI, KBC to invest euro 50 m in AMC

Union Bank of India (UBI) and Belgium-based KBC Asset Management will invest euro 50 million (about Rs. 302.42 crore) in their proposed joint venture asset management company, a top official said.

The joint venture, Union KBC Asset Management, has received in-principal approval from market regulator Securities and Exchange Board of India (SEBI).

“The total capital investment in the joint venture will be euro 50 million. It will be the best-capitalised company in India,” KBC Group Chief Operating Officer Danny De Raeymaeker told reporters here on Friday at the formal inauguration of the head office of the newly-formed company. The joint venture would have Union Bank of India as the major stakeholder with 51 per cent while the balance would be with KBC Asset Management.

“We have received an in-principal approval for the proposed mutual fund joint venture and the final approval will be received in the next 4-5 months,” Union Bank CMD M. V. Nair said.

The company would have a dedicated sales force of 500 people who would be placed in an equal number of branches of Union Bank, Mr. Nair said. The company would be leveraging the reach of Union Bank for selling mutual fund products, he said.

“We have our branches but will also tie-up with other banks for distributing our products,” Mr. Nair said.

The newly-formed joint venture would offer capital protected investment funds and open-ended equity funds. “We will be offering innovative and structured products,” Union KBC Asset Management's Chief Executive Officer G. Pradeepkumar said. — PTI



Source:http://www.hindu.com/2010/03/28/stories/2010032861121700.htm

Govt banks make a dash to start mutual fund business

IDBI Bank and Union Bank are the latest entrants.

n less than 24 hours, two public sector players—IDBI Bank and Union Bank of India—announced their foray into over Rs 781,000-crore mutual fund (MF) industry, though both have taken different routes.

While IDBI Bank decided to go solo, Union Bank has partnered Belgian asset manager KBC. By doing so, Union Bank has followed peers such as State Bank of India, Bank of Baroda and Canara Bank that have tied up with foreign partners.

IDBI Bank announced the launch of its asset management business on Thursday, while Union Bank of India announced its entry on Friday.

Other than Union Bank of India, Bank of Baroda has a tie-up with Pioneer Investments, a global asset manager. Canara Bank has a joint venture with Robeco Groep NV of the Netherlands and, in SBI Mutual Fund, the partner is Société Générale Asset Management.

Most of the public sector banks forayed into the MF business in early 1990s, but could not compete with the private sector players once the sector was opened to them around the same time.

“You cannot expect a banker to run an asset management company. Different skill sets are required for it,” said Dhirendra Kumar, chief executive officer of Value Research.

Among the top 10 fund house in terms of asset under management, based on the Association of Mutual Funds in India’s February data, three are in the public sector, and among them, only SBI Mutual Fund is owned by a bank. Experts said initially the banks continued to focus on their lending business, but the rise of equity markets since 2003 led them to re-focus on the MF business.

“The launch of the asset management business is in line with the bank’s long-term vision to emerge as a leading universal bank. IDBI Bank’s established brand name and extensive branch network will enable our asset management company to grow at a fast pace and become a leading player in the business,” said Yogesh Agarwal, chairman and managing director, IDBI Bank, while launching the MF business in Mumbai yesterday.

Union Bank of India Chairman and Managing Director MV Nair said the current penetration level of asset management companies indicated the vast untapped potential. The fund house has a vision to be among the top 10 in five years. It is targeting an average asset under management of about Rs 12,000 crore in three years.

Kumar of Value Research said the huge distribution network of public sector banks through their branches was an advantage which would be difficult for a standalone asset management company to match.

Source: http://www.business-standard.com/india/news/govt-banks-makedash-to-start-mutual-fund-business/389919/

Daiwa buys out Shinsei's MF arm

Barely a year after it commenced operations in India, Shinsei Bank Limited has decided to sell off its entire stake in Shinsei Asset Management Company (India), which manages Shinsei Mutual Fund (MF), to Daiwa Securities Group (comprising Daiwa Securities Group Inc and Daiwa AMC).
Shinsei AMC is promoted by Shinsei Bank of Japan. It holds 75 per cent stake in the AMC; 15 per cent is held by well-known investor Rakesh Jhunjhunwala and 1o per cent by Freedom Financial Services.
Under the agreement, the other two domestic share holders too will divest their stakes. Both the par

ties will apply to the Securities and Exchange Board of India (Sebi) for regulatory approval.
Sebi granted approval to Shinsei MF in February 2009. Its first fund was launched in June 2009. Shinsei AMC presently has three active funds – Shinsei Industry Leaders, Shinsei Liquid and Shinsei Treasury Advantage Fund.
The decision is part of Daiwa Securities Group’s plan to expand its business in Asia and to enter the Indian domestic asset management business.
Shinsei Bank is a leading diversified Japanese financial institution with total assets of US$ 124.9 billion on a consolidated basis (December 2009). Daiwa Group is also a leading financial services group from Japan. Daiwa is Japan’s second largest asset management company with over US$ 100 billion of assets under management.
Due to this development, Sanjay Sachdev, General Manager and Country Manager-India at Shinsei Asset Management has decided to quit.

Source: http://new.valueresearchonline.com/story/h2_storyView.asp?str=101333

NISM to conduct Association of Mutual Funds in India certification exam from June

Starting June 2010, the National Institute of Securities Markets (NISM), a division of the Securities & Exchanges Board of India (Sebi), will conduct the certification programme for professionals planning to enter the mutual funds industry.

So far, the Association of Mutual Funds in India (Amfi) has been deciding the syllabus and accepting registration formalities.
But now that the Sebi wants to bring all financial products certification programmes under one umbrella, the Amfi certification too will shift. “From June 1, 2010, the NISM will conduct the Amfi Certification,” A P Kurian, chairman of Amfi, who is retiring in September 2010, told DNA Money.

Amfi has not been able to update the regulatory blitzkrieg that the Sebi has bombarded the mutual fund industry with, since early 2009. The last update on the Amfi syllabus was done in 2006, after which a lot has changed on the Indian mutual fund slate.

Professor G Sethu, Sebi officer on special duty & in-charge of NISM, told DNA Money, “Amfi had last updated its syllabus some years ago and it is now time to include recent changes. In the regular case, Amfi itself would have done it, but we will do it now.”
Asked whether the registration for examination will change, Sethu said, “That procedure may change. We have not decided on it. Maybe the registration can come directly from Amfi.”

“We have to incorporate the changes that have taken place when we start looking at the workbook. They (the syllabus committee) will have to make it up to date,” Sethu added without defining the regulatory changes that would be adopted in the new version.

Until December 31, 2009, the Amfi certified 1.98 lakh individuals, of which 1.014 lakh have been registered as mutual fund agents.
It is learnt that NISM will continue to use the test administrators that the Amfi has been utilizing, which include the National Stock Exchange and Bombay Stock Exchange.

“The Amfi workbook covers what matters. However, we would be reviewing it for clarity, focus and current relevance after changes over a period of time. Objectives will reflect these changes.

Generally reviewing the syllabus of any certification is an annual feature, but in case of significant changes we might decide to review it when required,” said an NISM official not willing to be named.

Presently, the NISM conducts certification programmes for intermediaries in currency derivatives, registrar and transfer agents for stocks and registrar and share transfer agents for mutual funds.

The objective of the NISM is developing certification examinations for professionals employed in various segments of the Indian securities markets.

A newsletter of NISM stated early this year, “Of these NISM will shortly be launching Compliance (stock brokers) Certification Examination. NISM is also currently developing the course material for interest rate derivativesexamination.”

Source: http://www.dnaindia.com/money/report_nism-to-conduct-association-of-mutual-funds-in-india-certification-exam-from-june_1364973

IDBI Bank MF unit to focus on index funds

IDBI Asset Management Ltd, the fully-owned unit of IDBI Bank that received Securities and Exchange Board of India approval to launch mutual fund operations on Thursday, will focus on index funds on the equity front.

The first fund launch is likely to be IDBI Nifty Index Fund, which the company will file with regulator on Friday. The fund house, headed by Krishnamurthy Vijayan, has not hired an equity fund manager and has Gautam Kaul to manage fixed income funds.

The bank has invested Rs 25 crore in the mutual fund unit, Yogesh Agarwal, chairman and managing director, IDBI Bank, said. “We have an established retail model to distribute mutual fund products,” Agarwal said, adding the funds would be distributed via 700 branches of the bank in the country.

“Mutual fund business augurs well with the bank’s vision of providing entire gamut of financial services to clients,” he said.
Asked why IDBI Mutual Fund has decided to go solo after having got out of the 50% joint venture with Principal Mutual Fund in March 2003, Agarwal said, “When you marry you have to make adjustments, when you are a bachelor you are free to go the way you want”.

It is also learnt that Fortis, which is IDBI Bank’s partner for its insurance venture, had offered to be a partner in the mutual fund venture as well. But the bank declined it. “If need be, we can acquire one of the companies that are willing to exit the business,” Agarwal mentioned.


Source: http://www.dnaindia.com/money/report_idbi-bank-mf-unit-to-focus-on-index-funds_1363480

IDBI plans to re-enter MF biz

New launch: Mr Yogesh Agarwal (left), Chairman and Managing Director, IDBI Bank, and Mr Krishnamurthy, MD and CEO, IDBI Asset Management Ltd, at a press conference to announce the launch ‘Bank's Mutual Fund Subsidiary' in Mumbai on Thursday

IDBI Bank is re-entering the mutual fund space, this time around with its wholly owned subsidiary IDBI Asset Management. The bank has received all the necessary regulatory approvals and the first fund is expected to be launched by mid-April, said Mr Yogesh Agarwal, Chairman and Managing Director at IDBI Bank.

The first offering will be an index fund called the Nifty Fund based on NSE's Nifty, he said.

The bank has invested Rs 25 crore in the mutual fund and has earmarked another Rs 25 crore as the fund house grows, he said.

IDBI Bank had exited its 50:50 partnership with Principle Financial Services in 2003. Explaining the rationale behind re-entering the mutual fund business, Mr Agarwal said the bank had exited the venture to concentrate on setting up its retail business. “Now with an established retail presence, we think it's the right time to enter the mutual fund space,” he said.

Right now, the team consists of 27 people and the company plans to take the number up to 200, said Mr Vijayan, who earlier headed the asset management business of JP Morgan in India.

The launch of its asset management arm is IDBI Bank's efforts to broaden its product range, said Mr Agrawal. “The bank already advises on selling mutual fund and has over 1,000 AMFI trained personnel.”


Source: http://www.thehindubusinessline.com/2010/03/26/stories/2010032653501000.htm

‘Ear to the ground’ approach helped

Mahesh Patil, co-head (equity), Birla Sun Life Asset Management Co. Ltd shares what worked for the fund

In a year, when Sensex returned 80%, most mid-cap funds doubled investors’ money. Birla Mid Cap A Growth, managed by Sanjay Chawla, came on top and got Morningstar India Small/Mid Cap award. Mahesh Patil, co-head (equity), Birla Sun Life Asset Management Co. Ltd shares what worked for the fund. Edited excerpts:

What helped you emerge on top?
We invest only in fundamentally good companies, having excellent management, with reasonable valuations. These three principles have been our guiding force. Of course, this is backed by solid research with “ear to the ground” approach. This helps us spot potential winners. Strong research inputs are blended with the rich experience of fund managers.

Decisions that helped you?
Last year was exceptional. Most stocks were trading at a significant discount to their intrinsic value. We picked companies that were fundamentally sound but were hammered down due to global uncertainly. During the early part of the year, broad sector allocation worked well. Post-elections, stock-specific calls helped.

How did you handle the period between January and April 2009?
We revisited the companies we track to reassess the basic assumption of our investments. Our research helped us pick winners.

Your fund is larger now. Are you increasing exposure to large caps?
What we say is what we do and what we do is what we say. A mid-cap fund will not deviate from its mandate. We believe the investor has done his risk assessment and has chosen accordingly.

Currently, the size of the fund does not pose a challenge. We believe the corporate India story is in the early stages of growth and offers exciting opportunities in various sectors. Identifying these opportunities early is the key.

You maintain about 40 stocks in your portfolio. Given your increasing corpus, will you add more?
Mid-cap companies have a bit of challenge in terms of liquidity. Entry and exits may have an impact on the price. We would have stocks which we are trying to buy or sell at prices which we believe are reasonable. At times the portfolio would have 50 stocks, but the core portfolio will always have 40-45 stocks.

Source: http://www.livemint.com/2010/03/24224721/8216Ear-to-the-ground8217.html

Retail participation across debt funds will surely increase

ICICI Prudential Asset Management Co. Ltd managing director Nimesh Shah says active asset allocation and duration management has helped achieve this feat

For the second year in a row, ICICI Prudential Asset Management Co. Ltd won the Morningstar debt fund house of the year award at a ceremony on Monday. Nimesh Shah, managing director of the fund house, says active asset allocation and duration management has helped achieve this feat. Edited excerpts:

Following the turmoil in 2008, how has the year 2009 been for debt funds?
The year 2009 saw return in investor confidence and investor appetite across debt funds. The importance of credit quality and processes was established during the 2008 downturn. There was acknowledgement of the benefit of following efficient disclosure practices, which led to enhanced investor communication and further improved transparency. The 2008 turmoil was more a result of the global economic crisis which was successfully tided over by the industry in 2009, when it witnessed significant asset growth.

What are the key factors that helped you come out as the top performer both during troubled times and during recovery?
Our investment objective has always been optimizing risk and returns for our investors by investing in high-credit, fixed-income securities, managing interest rate risk and minimizing liquidity risk. Our strategy is to focus on our investment philosophy through which we seek to achieve safety, liquidity, and return (SLR) for our debt portfolio. This approach helped us retain investor confidence during the 2008 downturn and build long-term relationships.

We were doing the right things and the market environment has reinforced our faith in our processes. Our efforts, across debt portfolios, to neutralize credit risk by investing in high-credit quality instruments, minimizing liquidity risk by maintaining an asset–liability match and managing interest rate risk through active asset allocation and duration management has helped us create value for our investors.

How have your investment strategies changed along with change in the market environment after March 2009?
The sharp rise in fiscal deficit and supply of government bonds led to increased focus on active asset allocation and duration management. There was also increased focus on corporate bonds, driven by high spreads on the back of improving credit fundamentals. We continued to recommend short- to medium-term funds, given the increase in volatility at the longer end of the yield curve.

With interest rates beginning to harden, what is your view on the debt markets going ahead?
The RBI (Reserve Bank of India) has a difficult task of managing interest rate and inflation, while ensuring that the government’s borrowing programme goes through smoothly and as planned. An upward pressure is expected on interest rates. We expect 10-year government securities yields to gradually climb, supported by government intervention through OMO (open market operations) and other steps, such as SLR/HTM (held-till-maturity) hikes. The RBI recently hiked its repo and reverse repo rates in view of high inflation. Post-July, we expect inflation to moderate from the current levels, albeit on the back of good monsoon, base effect and growth. The RBI is still following a relatively easy monetary stance. If the economy continues its growth momentum, then the RBI would look towards a neutral monetary policy.

What kind of funds will do well in this environment?
On the debt fund side, in the current market environment, investment opportunities continue to present themselves at the shorter end of the yield curve. We expect funds that will provide investors with the benefit of staying locked into high yielding instruments of high-credit quality to be good investment options.

With equities doing so well this year, does it make sense for investors to invest in debt funds?
Debt and equity both being different asset classes have an important and balancing role in an investor’s portfolio. Hence, equity and debt exposure would be part of a portfolio based on the investment objective, risk appetite and time horizon. We, therefore, expect asset allocation to provide guidance to investors on the asset class exposure. For investors who are underweight on equity, we recommend them to use all corrections as an opportunity to invest in the equity markets with a long-term view.

Also, India is a linear growth story and one of the fastest growing economies. The corporate sector is bound to benefit from this story over the long term. So, those investing in Indian equity with a long-term view will be well positioned to create value in their portfolio.

What role do debt funds have in the coming years as the regulator is keen on reducing the reliance of mutual funds in corporate money and focus more on retail investors?
There is surely going to be a trend of increase in retail participation across debt funds. So far, retail participation has been mainly through FMPs (fixed maturity plans). However, going forward, we expect that there will be greater retail participation in most of our flagship debt funds. In fact, increasing retail penetration across debt funds along with equity is going to be our focus area over the next few years.

Source: http://www.livemint.com/2010/03/23203923/Retail-participation-across-de.html

HDFC and ICICI best fund houses

Morningstar picked the best equity and debt fund houses after matching them against stringent guidelines. Nine schemes belonging to various categories were also awarded

When you hand over your hard-earned money to people who claim to be professionals in managing money, it pays to stick to the best. Better still, it makes sense to stay invested in consistent performers.

So much for picking and choosing schemes, but sticking to fund houses that come with a good pedigree is also important. Typically, a good pedigreed fund house is one with most of its schemes doing well and not just one or two. A fund house with a large basket of good performers instills confidence. That is where Morningstar Fund Awards 2009 come in.

What is it about?
Morningstar awarded top honours to nine schemes in their respective categories and culminated the evening by awarding the best equity fund house and best debt fund house to HDFC Asset Management Co. Ltd and ICICI Prudential Asset Management Co. Ltd, respectively.

Care has been taken to choose fund houses with substantial weight. Hence, one of the award guidelines makes it mandatory for fund houses to have at least 10 funds to be considered for either of the two categories.

Further, consistent track record is important. Only those funds that have completed three years have been accounted for. This assumes additional significance for Morningstar Awards as the past three years have been very volatile for equity markets. If 2007 saw markets rising to unprecedented levels, 2008 saw them come crashing down on the back of global liquidity crisis that also caught all mutual funds unawares. Then, 2009 saw a global recovery that catapulted all equity funds back in the green.

Schemes that did well in both falling and rising markets came out trumps. Also, the ones that converted their excess cash levels and bought equities before the markets started rising from March 2009 got the benefit of the upside. A fund that performs well across all market cycles bodes well for investors. This was one of the main reasons why HDFC AMC took away this year’s best equity fund house award.

Similarly, debt markets saw interest rates rising and falling in the past two years. Predicting the duration correctly is important for a debt fund and that is where our best debt fund house winner, ICICI Prudential AMC, scored the most.

Risk-adjusted performance
It’s not just returns that Morningstar recognizes. How well a fund manages its risks, such as volatility and downside, is equally important.

All funds that came out on the top were judged based on their risk-adjusted performance. Here’s where consistency comes in. Rather than picking and choosing a fund that gives superlative performance in one year and then falls miserably in the next, prudent investment norms suggest picking funds that show consistent performance, adjusted for their risks.

The leftovers
It’s important to judge a fund house based on the performance of their basic and core schemes. Since these schemes appeal to a wider section of the investing community, it’s essential that the core schemes’ performance is accounted for. Therefore, Morningstar Awards 2009 avoided sector, global, arbitrage, short government, floating rate and fixed maturity plans.

METHODOLOGY
Since the awards are annual, Morningstar believes it is appropriate to emphasize a fund’s one-year performance. However, we do not wish to award funds that have posted a strong one-year return, but have not delivered in the long run.

The awards methodology emphasizes on the funds’ one-year performance but, at the same time, mandates that funds should also have delivered strong three-year risk-adjusted returns within the awards peer group.

MORNINGSTAR CATEGORY AWARDS

Eligible universe
These awards are given to funds with the best risk-adjusted performance within their Morningstar groupings of Morningstar categories, subject to qualitative review.

Only funds that are recorded in the Morningstar database as available for sale in a given market will be eligible to receive an award in that market. Insurance funds and closed-end funds have been ignored.

The smallest 10% of funds in assets under each Morningstar category are excluded from the awards based on the latest December-end portfolios. In lieu of this measure, funds with less than Rs50 crore in assets as of 31 December or the nearest date for which the figure is available have been excluded.

Categories eligible for the awards
The awards are given in the following categories.

Equity: Large-cap, small/mid-cap, equity-linked saving schemes (ELSS, tax-saving)

Allocation: Moderate, conservative

Fixed income: Ultra-short bond, short-term bond, intermediate/long-term bond, intermediate/long government

Categories excluded from the awards

Sector funds, global funds, arbitrage funds, short government, floating rate funds, fixed maturity plans

Scoring system

• Each fund in a relevant group scores as follows:

• Returns score = 80% of the total score, as below

• One-year returns: 25% of the total score, based on one-year return percentile rank in Morningstar category.

• Three-year returns: 55% of the total score, based on three-year return percentile rank in Morningstar category.

• Risk score= 20% of the total score, based on three-year Morningstar risk percentile rank in Morningstar category.

Weights: Based on above weights, the effective weight of each year in the calculation is as follows, including both risk and return (figures are rounded to nearest whole number):

Past one year: 50%

Second year: 25%

Third year: 25%

Further, funds that have not outperformed their Morningstar category median in at least two of the past three calendar years have not been considered.

Qualitative review
Based on the above scores, the 10 funds with lowest scores in each Morningstar award category were reviewed for the following qualitative checks:

Funds that are deemed inaccessible to local market investors and retail investors excluded

Funds where the portfolio manager has been in charge for less than one-year excluded

If an analyst has reasons to believe that a fund cannot continue to outperform, then such a fund would be removed from consideration after discussion with heads of the Morningstar research team

Any fund that is deemed to have deviated from its stated mandate not considered

All institutional share classes removed

MORNINGSTAR FUND HOUSE AWARDS
The Morningstar Fund House Awards recognize those fund families that have delivered sustained outperformance on a risk-adjusted basis across their fund line-ups. Here are the award categories and eligible groups.

Morningstar Best Equity Fund House Award: Fund houses with at least 10 open-ended equity funds with minimum three-year records in the Morningstar database are eligible.

Morningstar Best Debt Fund House Award: Fund houses with at least 10 open-ended fixed-income funds with minimum three-year records in the Morningstar database are eligible.

Eligible funds
Those funds with three-year Morningstar ratings are eligible for inclusion in the scoring (see below). Thus, funds without three-year records or funds in unrated Morningstar categories are excluded from the scoring process.

Scoring systems
For each of the above two groups, Morningstar will calculate a house score using the following methodology:

• Determine the three-year Morningstar risk-adjusted return (MRAR) for each share class of each fund run by a given house, and the percentile rank of that return score within its Morningstar category.

• Determine the average percentile rank of each fund’s MRAR by taking the mean MRAR percentile rank of all its classes.

• Determine the mean percentile rank of each fund house’s MRAR by taking the mean of its funds’ MRAR percentile ranks (the lower a group’s mean percentile rank, the better its performance).

• Adjust the score using the following probability function to compensate for the difference in fund house sizes. The adjustment enables us to account for the fact that the number of funds varies from one group to another and, therefore, makes it possible to compare the different mean scores of the competing groups.

Qualitative review
Morningstar reviews the scoring results and may disqualify a firm if they do not offer retail shares or if there are extenuating circumstances. These might include (but are not limited to) the loss of a group of talented managers, substantial increases to fund expenses, non-availability of the house’s funds to retail investors in the relevant market, or being taken over by another group. Each disqualification would be approved by the heads of Morningstar’s research team. The review is intended to prevent giving an award on the basis of performance that we believe is unlikely to be repeated due to structural factors.

Outcome
The remaining fund firms with the lowest score in each of the above groups will receive the relevant Morningstar Fund House Award. There will only be one award in each of the categories listed above. If there are fewer than three eligible groups in any of these categories, no award will be made in that category.

Source: http://www.livemint.com/2010/03/22203953/HDFC-and-ICICI-best-fund-house.html?pg=2

Bonds gain as RBI says inflation to slow by July

The 10-year bonds advanced after RBI governor D Subbarao said the inflation rate, which touched a 16-month high in February, should start to moderate by July.

Yields dropped after Planning Commission deputy chairman Montek Singh Ahluwalia said on Monday India must aim to slow inflation to an “acceptable” level of 5% to 6%. The nation’s bonds have “priced in” at least a 100 bps increase in interest rates, said Anoop Verma, a fixed-income trader at Development Credit Bank in Mumbai.

“Efforts to curb inflation have increased the attractiveness of bonds as quite a bit of rate hikes have been factored in at these levels,” Verma said. “Supply of bonds will be the major concern now.”

The yield on the 6.35% note due January 2020 fell 1 basis point to 7.85%. The price rose 0.5, or 5 paise per Rs 100 face amount, to 89.90.

The central bank on March 19 increased the benchmark reverse repurchase rate to 3.5% from a record-low 3.25% and the repurchase rate to 5% from 4.75%. The wholesale-price inflation reached 9.89% in February.

“The Reserve Bank of India, sensitive to inflation concerns, is committed to maintaining the growth momentum,” Governor Subbarao said on Monday. “The challenge for us is to balance the requirements of growth against the concerns of inflation. We believe that by June-July, inflation should start moderating.”

Finance minister Pranab Mukherjee last month said the government plans to borrow Rs 4.57 lakh crore ($100.2 billion) in the financial starting April 1.

Source: http://economictimes.indiatimes.com/markets/bonds/Bonds-gain-as-RBI-says-inflation-to-slow-by-July/articleshow/5717661.cms

Sundaram BNP Paribas MF Declares Dividend For S.M.I.L.E Fund

Sundaram BNP Paribas Mutual Fund has declared dividend on the face value of Rs.10 per unit under dividend option of Sundaram BNP Paribas S.M.I.L.E Fund (Small and Medium Indian Leading Equities Fund). The record date for dividend is set as 26 March 2010.

The quantum of the dividend will be 30% i.e. Rs 3 per unit as on the record date. The NAV for Regular Plan was Rs 14.9552 per unit and Rs 15.0077 per unit for Institutional Plan as on 19 March 2010.

BNP Paribas S.M.I.L.E Fund is an open ended equity fund scheme, with an investment objective to achieve capital appreciation by investing in diversified stocks that are generally termed as Small and Midcaps and by investing in other equities.

Source: http://www.bloombergutv.com/stock-market/mutual-fund/commentary/382213/sundaram-bnp-paribas-mf-declares-dividend-for-s-m-i-l-e-fund.html

Newly listed Jubilant FoodWorks continues to dazzle

Jubilant FoodWorks is trading 4% higher at Rs 357 after HDFC Mutual Fund bought over 3% stake in the company through block deals. So far, 1.91 million equity shares have changed hands in the counter so far on the BSE.

The Indian franchisee of US-based pizza company Domino’s share price has more than doubled from its issue price of Rs 145 per share. The stock got listed on February 8, 2010. The company recently opened 300th store in India and the 900th store worldwide.

Reliance Mutual Fund, Arisaig India and Capital Group are some of the other big investors that purchased the stake in the company post listing.

The stock opened at Rs 340 and touched high of Rs 362, have seen 1.91 million equity shares change hands on the counter so far on the BSE.

Source: http://www.business-standard.com/india/news/newly-listed-jubilant-foodworks-continues-to-dazzle/89073/on

For regular income

CANARA ROBECO MIP
Last year's performance established this fund as one of the best players in its category. It returned 28 per cent, almost twice the category average.

The scheme seeks to generate income by investing in debt, money market instruments and a small portion in equity, around 10-25 per cent.

Since 2005, the fund had been delivering more than the category average, though it hit a bad patch in 2009. The reason for that could be equity allocation. Historically, this fund keeps a higher equity allocation than the category average, at times going beyond the mandated 25 per cent limit, as it did in December 2007 (29.37 per cent). Over the past year, it kept an average equity allocation of 19.44 per cent (category average, 15.13 per cent).

It has always kept a very small equity portfolio in terms of number of stocks, which changed from 2008. It now holds 48 stocks, a progressive increase from 22 in January 2009.

Over the past year, the fund allocated most of its investments in short-term instruments like overnight papers (55.77 per cent) and Certificate of Deposits (15.16 per cent). Hence, its average maturity has hovered mostly below a week, while the category average was 2.88 years. In 2009-end, the fund hiked its average maturity to around a year.

The fund is ranked third in its category on a five-year time frame, with an annualised return of 14 per cent.

DBS CHOLA MIP
For the two years preceding December 2009, the fund had been declaring a dividend every single month.

The primary objective is to generate a monthly income through investments in equity, debt and money market instruments. However, the returns are not assured.

This fund showed disappointing performance for two years, the fund managers took over in 2007 and turned around the fund. In 2008, the fund shone with a return of 7.52 per cent (category average, minus 3.7 per cent). Last year, it underperformed, but, its three- and five-year returns placed it ahead of the category average.

Whenever the fund sees opportunity in equity, the fund manager tanks up on it. Or, flees when the tables turn on this asset class. In May 2009, the fund's equity exposure stood at 19.5 per cent, but did not cross the mandated 20 per cent level. At other times, the equity allocation has been lowered to a miniscule one per cent (November 2008). Overall, its equity tilt is pretty moderate.

This flexibility is also reflected in the churning of the portfolio. The number of stocks can range from two (October 2008) to 21 (June 2008). Though, the number of stocks held have drops, too, and so does the equity allocation. The fund manager actively dabbles in derivatives and when futures are traded at a discount, the futures and options (F&O) route is opted for.

On the debt side, the fund maintains a lower maturity profile and sticks to high-quality paper. It hardly invests in long-dated G-Secs. Currently, 44 per cent of its portfolio is in commercial paper of financial and automobile sectors. Since July 2008, the fund has allocated an average 18 per cent to debentures. The main problem is its expenses, which are on the higher side.

DSPBR SAVINGS MANAGER AGGRESSIVE
Launched in May 2004, the fund's returns have been in line with the category average, with substantial outperformance in 2009. This open-ended income scheme seeks to generate attractive returns, consistent with prudent risk and the portfolio contains quality debt securities and money market instruments substantially for liquidity purposes. Up to 30 per cent of the corpus is invested in stocks of 100 large corporate houses by market capitalisation.

Though the highest equity allocation the fund has touched is 27.54 per cent, there is a tendency to pull down the exposure sharply if market conditions are unfavourable, to less than eight per cent on three occasions in the past.

The fund keeps a pretty tight stock portfolio. Of the 13 stocks (average over the past year), at times, the number of stocks held has increased to 23 and contracted to just three. But, investors need not fret. The mandate ensures the equity portion has a strong large-cap bias and the fund has allocated an average 86 per cent to large-cap stocks, since launch.

On the debt side, this fund invests a major part of its portfolio in floating rate instruments, which minimises the interest rate risk. In the last one year, the exposure to this kind of paper has been around 28.81 per cent of the total portfolio, going up to 47.04 per cent. Other instruments are overnight paper (21.16 per cent) and bonds (22.89 per cent). The fund has refrained from investing in anything below AA+ since September 2009.

With a five-year annualised return of 10.92 per cent, it's a tough choice to ignore.

Source: http://www.business-standard.com/india/storypage.php?autono=389243

Did You Know? |MF disclosures are not standardized

The Securities and Exchange Board of India (Sebi) mandates fund houses to disclose various aspects of their portfolio regularly

Almost all mutual funds (MFs) disclose full details about stocks and sectors. But if you compare their fact sheets more closely, you will find additional information, such as financial ratios or other performance indicators. The problem, however, is that not all fact sheets disclose all such information. For instance, one fact sheet may give you a Sharpe ratio, the second may give you turnover ratio, and the third modified duration.

Sebi mandate: The Securities and Exchange Board of India (Sebi) mandates fund houses to disclose various aspects of their portfolio regularly. Portfolios are mandated to be disclosed twice a year in a pre-specified format in which details, including modified duration and portfolio turnover, are supposed to be given.

Amfi proposal:Since most fund houses disclose portfolios every month, the industry body, Association of Mutual Funds of India (Amfi) felt there should be some kind standardization. The Amfi committee, set up for this purpose, has proposed several aspects of the schemes and fund houses that should be disclosed. Some of these are mandatory, some optional in a fixed format, and some optional in any format.

The road ahead: Though Amfi sent its recommendation to all fund houses in October 2007, not much progress has been made. As Amfi is a trade body, its recommendations are not mandatory on funds, unless Sebi says they are compulsory.

Source: http://www.livemint.com/2010/03/18205408/Did-You-Know-MF-disclosures.html

Dividends out of realised gains: Sebi

In a move aimed at increasing transparency among mutual funds, the Securities and Exchange Board of India (Sebi) has in a recent directive asked mutual funds to distribute dividends out of realised gains only, and not out of unit premium reserve.

What does this mean? Imagine that the face value of a fund is Rs 10, and over time its NAV rises to Rs 50. The Rs 40 (the gain in NAV) is the unit premium reserve.

Earlier, fund houses would pay dividends out of the unit premium reserve. In effect, they were ‘rewarding’ investors by paying them out of their purchase price itself.

Now Sebi has stipulated that mutual funds must pay dividends out of realised gains (money made by the funds from the sale of the shares held by it).

Earlier, fund houses were using dividend declarations as a sales ploy (effectively saying, “Invest in our fund because we declare higher dividends and we declare them more often.”)

If Sebi is able to implement this ruling tightly, fund houses will increasingly find it difficult to declare high rates of dividends, or to declare dividends frequently.

Two, in the same circular (dated March 15) Sebi has issued a directive regarding the fee charged by no-load funds. Earlier, when you had schemes that charged an entry load and others that were no-load, the no-load schemes were allowed to charge an additional management fee of 25 basis points. Since Sebi’s August 2009 all funds have become no-load. Sebi has now asked no-load funds to stop charging the additional 25 basis points as fee.

Three, earlier open-ended fund could have an NFO period of up to 30 days while close-ended funds could have an NFO period of up to 45 days. Now Sebi has reduced the NFO period for all funds (the sole exception being ELSS funds) to 15 days. Effectively this means that fund houses have less time to garner funds during an NFO and will have to work harder.

Four, earlier a fund housing launching fund-of funds would get some commission from the underlying scheme. Now Sebi has stipulated that any commission or brokerage which the Indian fund house issuing the fund-of-funds receives must be added to the scheme’s account.

And finally, any brokerage or commission paid to the fund’s sponsor, its associates or related people must be disclosed in the fund house’s half-yearly report.

Source: http://new.valueresearchonline.com/story/h2_storyview.asp?str=101308

Hang Seng BeES India’s First International ETF Open for Trading

From today onwards Indian investors can invest in China with India’s First International ETF-Hang Seng BeES listed on the NSE with symbol HNGSNGBEES. The fund was open for public subscription last month from 15-24 Feb.

ETFs are mutual fund units and comprise baskets of securities from the underlying Index, it trades like individual stocks on an exchange and unlike regular open-ended mutual funds, can be bought and sold throughout the trading hours like any stock and charge lower annual expenses than any open-ended index mutual fund.

The fund is first international ETF promoted by Benchmark Mutual Fund and tracks Hang Seng Index that comprises of 42 companies including HSBC Holdings, China Mobile, Bank of China, Cathay Pacific Airways and China Construction Bank Corporation and represents approximately 60% of the total market capitalisation of Hong Kong stock Exchange.

The asset allocation under this scheme will be 90-100% in securities constituting Hang Seng Index and; 0-10% in money market instruments, G-Secs, bonds, debt instruments and cash at call, mutual fund schemes / overseas exchange traded funds based on Hang Seng Index.

Hang Seng BeES is design to take care of the foreign exchange conversions and investors in India can invest in Rupee terms through their Dmat and Trading account or through a NSE member who can execute the order.

The fund is ideal for investors who want to have international exposure and are bullish on China, which even in the face of a global recession has been a source of interest for investors around the world.

Fund Name: Hang Seng Benchmark Exchange Traded Scheme (Hang Seng BeES)

Benchmark Index: Hang Seng Index

Investment Objective: The investment objective of the Scheme is to provide returns that, before expenses, closely correspond to the total returns of securities as represented by Hang Seng Index of Hang Seng Data Services Limited, by investing in the securities in the same proportion as in the Index

Option: The Scheme offers only Growth Option

Load: Entry Load: NIL ; Exit Load: NIL

Source: http://www.businesswireindia.com/PressRelease.asp?b2mid=21972

Remain invested, growth should be back on track

Vinay Kulkarni, senior fund manager, HDFC Asset Management Co Ltd addresses questions about larger issues in the economy as well as those related to his fund. Log on next Wednesday to meet another fund manager.

KEA: Do you think markets are overheated? If yes, then should we book profits?
Kulkarni: Valuations are reasonable. Growth should be back on track in FY11. So, I think one should remain invested.

KEA: I think in 2007 your HDFC Taxsaver’s performance went down sharply compared with many other funds. What was the reason?
Kulkarni: Discomfort with high valuations kept us away from sectors, such as real estate, power utilities and NBFCs. These sectors outperformed the market. Since HDFC TaxSaver was underweight in these sectors, it underperformed in 2007.

Pine: Which sectors do you think would outperform the market in the coming six months and why?
Kulkarni: Currently, we see good prospects for the banking sector, led by robust credit growth in FY11, engineering and infrastructure sector based on revival of the capital expenditure

cycle, IT sector as a play on global economic recovery, pharmaceutical sector based on company-specific positive drivers and the fast-moving consumer goods sector based on the Budget which has left more disposable income in the hands of the salaried class.

Kusum: Post Budget, how do you see the investment environment shaping up?
Kulkarni: The Budget has given a boost to consumption by increasing disposable income in the hands of the salaried class. Also, the return of fiscal discipline should cap inflation expectations. The government’s intention to be an enabler and ensure the right environment for private enterprise is also a boost for private sector entrepreneurs.

Source: http://www.livemint.com/2010/03/17213021/Remain-invested-growth-should.html

Don’t have a demat to invest in ETFs? Go through other funds

If you have not been able to invest in a gold exchange-traded fund (ETF) yet because you do not have a demat account, help is on your way. Mutual fund houses will soon start launching gold fund of funds (FoF) that will invest your money in gold ETFs.

Easy route

Investing in gold has caught the fancy of many investors of late, thanks to the surging price of the yellow metal over the past year.

At present, there are seven gold ETFs in India. However, to be able to invest in them, you need a demat account as they are listed on the stock exchanges. Most investors, especially who do not like to invest in stock markets, do not have demat account and hesitate in opening one and gold FoFs are meant for them.

Gold FoFs will be made available to the public through usual distribution channels, such as agents. To invest, fill up a form the good old way, write a cheque and give it your agent or fund house.

“It also allows investors to invest systematically through systematic investment plans, which is not possible through ETFs. Else, you get lost in price calls and miss out on opportunities,” says Chirag Mehta, fund manager, Quantum Asset Management Co. Ltd.

Could be costly

The convenience comes at a cost, however. As per the Securities and Exchange Board of India (Sebi), FoFs can charge a maximum of 0.75% a year. This is in addition to the charges of underlying schemes (in this case, gold ETFs) that will eventually be passed on to you.

However, some MFs such as Quantum and Benchmark schemes do not intend to charge annual expenses. Investors will only have to bear the expenses of the underlying ETF in which the FoF will invest.

It remains to be seen what the final structure of gold FoFs would be when they are finally launched.

Source: http://www.livemint.com/2010/03/14213349/Don8217t-have-a-demat-to-in.html

Sebi’s new notifications favour small investors

From streamlining the process of declaring dividends to nudging funds to play an active role in corporate governance, Sebi ensures more transparency

You won’t have to wait forever to get your first account statement and units allotted once you have invested in a new fund offer (NFO) of a mutual fund (MF) scheme. The Securities and Exchange Board of India (Sebi) announced this, along with a few other key rules, in a circular issued on 15 March. Here’s what they mean for you.

New fund offers’ duration
All NFOs, except equity-linked saving schemes, will now be open for a maximum of 15 days, down from 30 days for open-ended funds and 45 days for closed-end schemes. Once the NFO closes, your fund will have to allot units and dispatch the account statements within five days, down from 30 days earlier.

While this move is good for investors, some fund managers are concerned. “A 5-day period looks tight. It will be an operational challenge to meet this deadline because to get all the forms, cheques and process from all over India will be difficult in these five days,” says Rajan Krishnan, chief executive officer, Baroda Pioneer Asset Management Co. Ltd.

Asba for MF investors
Asba, orApplications Supported by Blocked Amount, is a payment mechanism initiated by Sebi in July 2008 for those investing in initial public offers or rights issue. Under this, the money that you set aside for your application does not leave your bank account till the shares are allotted to you. As a result, your money keeps earning interest, though the funds are frozen and you can’t use them. Also, it negates the need of a refund if shares don't get allotted to you. Sebi has now extended this facility to MF investors.

Though Asba means little for MF investors because you always get 100% units allotted, it protects your money from market vagaries since Sebi also mandates NFOs to now invest your proceeds only after the NFO closes and allot units within five days after that. Both Asba and the new NFO time frame will be applicable for NFOs launched after 1 July.

Corporate governance
In December 2008, when Srinivas Vadlamani, former chief financial officer, and B. Ramalinga Raju, founder and former chairman of Satyam Computer Services Ltd, met fund managers and analysts on a conference call to explain the rationale of acquiring 100% stake in Maytas Properties Ltd and 51% share in Maytas Infrastructure Ltd for $1.6 billion, all hell broke loose. While Satyam Computer Services was into information technology, Maytas Properties was into real estate and Maytas Infrastructure into infrastructure. Moreover, both were owned by Raju’s children.

Fund managers vociferously opposed the proposed takeover. The reporter has the transcript of that call. They expressed their shock, called the transaction an example of “third grade corporate governance practices” and expressed concerns that this could possibly lead to a scenario where foreign investors would desert Indian companies. Fund managers and analysts forced Satyam to abandon the plans, which would have cost the minority shareholders of Satyam dearly. A few days later, Raju admitted to fraud. Although investors of Satyam lost eventually, it was probably one of the few instances in public light where fund managers and equity analysts protected the right of the minority shareholders and put pressure on a corrupt management to change course.

Sebi now wants MFs to be more active in corporate governance. Sebi feels it is appropriate to allow MFs to voice their opinion as they are vehicles for small investors. Sebi has now made it mandatory for funds to disclose whether they voted for or against moves (suggested by companies in which they have invested) such as mergers, demergers, corporate governance issues, appointment and removal of directors. MFs have to disclose it on their website as well as annual report. “As markets mature, institutional activism will definitely rise,” says Jayesh Shroff, fund manager, SBI Funds Management Pvt. Ltd.

Pay dividends from gains
Typically, when funds pay dividends, they are supposed to pay out of their profits or realized gains. For instance, if you invest in a fund at a net asset value (NAV) of Rs12, Rs10 will go to an account called unit capital, assuming the fund’s face value is Rs10. The balance of Rs2 (Rs12 less Rs10) goes into a separate account called unit premium reserve. If this Rs12 goes up to Rs13, the fund can declare a dividend of Re1—its gains.

However, Sebi noted that some fund houses were paying dividends from their unit premium reserve instead of the realized gains. Industry sources claim that some funds used to do this to attract large investors by giving them advance notice in private and then allowing them to book losses (NAV drops after dividend declaration), claim losses and set them off against other gains.

Less commission for FoFs
Life just got tougher for fund of funds (FoFs) that invest their entire corpus in international funds. Typically, FoFs charge a maximum of 0.75% per annum. Out of this, the MF pays agent commission and incurs costs on running the scheme and keeps what is left, which fund houses claim is a pittance. To compensate, FoFs enter into a revenue sharing agreement with international funds in which they invest. The international fund pays a small portion, typically 50-80 basis points, to the Indian FoF, which would then retain this amount as its income.

Sebi has now put a stop to this revenue sharing agreement. Fund houses aren’t too happy as they claim it would now be unprofitable to launch and manage FoFs. “If asset management companies do not make any money, these FoFs may stop. International countries and assets were a good way of diversifying our money,” claims a fund manager of a fund house that has an FoF.

Money Matters take
From streamlining the process of declaring dividends to nudging funds to play an active role in corporate governance, Sebi has done well in making MFs more transparent. Cutting down the allotment time to five days, down from 30 days, is bound to pose a challenge to MFs and it remains to be seen how they respond.

Source: http://www.livemint.com/2010/03/16220634/Sebi8217s-new-notifications.html

Sebi extends Asba to MFs, clamps restrictions

Under the facility, the money invested will be held in the investor’s bank account and released only after the units are allotted

The Securities and Exchange Board of India (Sebi) has extended the application supported by amount (Asba) facility to mutual fund investors. Investors subscribing to new fund offers (NFOs) of mutual fund schemes can now apply to these schemes without paying subscription money upfront.

Under the facility, the money invested will be held in the investor’s bank account and released only after the units are allotted.

The market regulator also shortened the subscription period for NFOs to 15 days from the current 30 days for so-called open-end funds, and 45 days for close-end funds. The new rule will apply to all new schemes launched after 1 July.

Sebi also provided for more disclosures on commissions paid to associates and related entities of asset management companies. It also imposed restrictions on dividend declarations, and banned commissions from underlying funds while running fund of funds.


Source: http://www.livemint.com/2010/03/15225323/Sebi-extends-Asba-to-MFs-clam.html

JM Financial MF Declares Dividend For Basic Fund

JM Financial Mutual Fund has announced the declaration of dividend on the face value of Rs.10 per unit under dividend option of JM Basic Fund - Dividend Plan. The record date for dividend has been fixed as 19 March 2010.

The quantum of dividend will be 10% (Rs. 1 per unit) as on the record date. The NAV of the plan was at Rs. 13.5641 as on 12 March 2010.

JM Basic Fund is an open ended equity oriented growth scheme, which has the investment objective to provide capital appreciation to its unitholders through judicious deployment if the corpus of the scheme in sectors categorized under ‘'basic industry" in the normal practice and in context of the Indian economy, including but not limited to, energy, petrochemicals, oil & gas, power generation & distribution and electrical equipment suppliers, metals and building material. The fund would continue to remain open-ended with a sector focus.

Source: http://www.apollosindhoori.cmlinks.com/MutualFund/MFSnapShot.aspx?opt=9&SecId=10&SubSecId=22,24

JM Financial MF Declares Dividend For Multi Strategy Fund

JM Financial Mutual Fund has announced the declaration of dividend on the face value of Rs.10 per unit under dividend option of JM Multi Strategy Fund - Dividend Plan. The record date for dividend has been fixed as 19 March 2010.

The quantum of dividend will be 10% (Rs. 1 per unit) as on the record date. The NAV of the plan was at Rs. 14.0684 as on 12 March 2010.

JM Multi Strategy Fund, is an open-ended equity oriented scheme, which has the investment objective to provide capital appreciation by investing in equity and equity related securities using a combination of strategies.

Source: http://www.apollosindhoori.cmlinks.com/MutualFund/MFSnapShot.aspx?opt=9&SecId=10&SubSecId=22,24

JM MF Declares Dividend For Nifty Plus Fund

JM Financial Mutual Fund has announced the declaration of dividend on the face value of Rs.10 per unit under dividend option of JM Nifty Plus Fund - Dividend Plan. The record date for dividend has been fixed as 19 March 2010.

The quantum of dividend will be 15% (Rs.1.5 per unit) as on the record date. The NAV of the plan was at Rs. 16.3957 as on 12 March 2010.

JM Nifty Plus Fund is an open ended equity scheme, which has the investment objective to generate investment returns by predominantly investing in S&P CNX Nifty Stocks and its 50 constitutes in the same weightages as its composition and through deployment of surplus cash in debt and money market instruments and derivative instruments.

Source: http://www.apollosindhoori.cmlinks.com/MutualFund/MFSnapShot.aspx?opt=9&SecId=10&SubSecId=22,24

Sundaram BNP Paribas MF Declares Dividend For Tax Saver Scheme

Sundaram BNP Paribas Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit under dividend option of Sundaram BNP Paribas Tax Saver Scheme. The record date for dividend has been fixed as 19 March 2010.

The quantum of dividend will be 10% i.e Rs 1 per unit on the face value of the unit as on the record date. All the Unit Holders whose names appear on the Register of Unit Holders of the scheme, as at the close of business hours on the said record date shall be eligible to receive dividend declared. Declaration of dividend is subject to availability of distributable surplus on the record date. The scheme recorded NAV of Rs 11.9742 as on 12 March 2010.

Sundaram BNP Paribas Tax Saver is an open end equity linked savings scheme. The investment objective of the scheme is to seek capital appreciation by investing predominantly in equities and equity related instruments.

Source: http://www.apollosindhoori.cmlinks.com/MutualFund/MFSnapShot.aspx?opt=9&SecId=10&SubSecId=22,24

Edelweiss MF Announces Change in Key Personnel

Edelweiss Mutual Fund has announced that Mr. Venkatesh Sanjeevi, the Co - Fund Manager of Edelweiss ELLS Fund, Edelweiss Diversified Growth Equity Fund and Edelweiss Absolute Return Equity Fund, has tendered his resignation and ceased to be a Key Personnel with effect from close of business hours on 12 March 2010. Mr. Paul Parampreet, the existing Co - Fund Manager, shall now be the sole Fund Manager of the above schemes.

Source: http://profit.ndtv.com/2010/03/16100149/Edelweiss-MF-Announces-Change.html

JM Financial MF Declares Dividend For Large Cap Fund

JM Financial Mutual Fund has announced the declaration of dividend on the face value of Rs.10 per unit under dividend option of JM Large Cap Fund - Dividend Plan. The record date for dividend has been fixed as 19 March 2010.

The quantum of dividend will be 10% (Rs.1 per unit) as on the record date. The NAV of the plan was at Rs. 13.6960 as on 12 March 2010.

JM Large Cap Fund is an open ended equity scheme, which has the investment objective to generate returns by predominantly investing in Large Cap companies which would be top 100 companies on the National Stock Exchange of India in terms of market capitalization.

Source: http://profit.ndtv.com/2010/03/15141249/JM-Financial-MF-Declares-Divid.html

Tata MF Declares Dividend For MIP Plus Fund

Tata Mutual Fund has declared dividend on the face value of Rs. 10 per unit under the quarterly and half yearly dividend option of Tata MIP Plus Fund. The record date for the dividend is set as 18 March 2010.

The quantum of the dividend is as follows:

Quarterly Dividend: Rs. 0.1479 per unit, NAV: Rs. 11.1837 per unit.

Half Yearly Dividend: Rs. 0.2992 per unit, NAV: Rs. 11.9886 per unit.

NAV of the above options is as on 11 March 2010.

Tata MIP Plus Fund is an open ended debt scheme, with an investment objective to provide reasonable & regular income along with possible capital appreciation to its unitholders

Source: http://profit.ndtv.com/2010/03/13113350/Tata-MF-Declares-Dividend-For.html

'India has the most robust success story across emerging markets'

HSBC Mutual Fund feels the market may move in a narrow range for a while and the next move will come when there are earnings upgrades for the next financial year. The fund is upbeat on infrastructure and construction equipment sectors, but a bit wary on materials. Tushar Pradhan, its Chief Investment Officer, who manages over Rs 6,500 crore, shares his views in a conversation with Vandana. Edited excerpts:

Markets have been moving in a very tight range. How do you see them panning out from here?
Indian markets take cues from international flows. We have not seen either dramatic outflows or huge inflows since the beginning of this year. As a result, we saw markets drifting off. My sense is that foreign institutional investors (FIIs) were waiting for some sort of a signal in the Budget. The fact that there was no negative in it was a great relief. Hence, we saw significant inflows post Budget, which led to the rally. That was money waiting in the wings.

Going forward, two things may happen. One is that the y-o-y (year on year) numbers for the fourth quarter, compared to the fourth quarter of last year, could see a significant increase in earnings for Indian companies. The fourth quarter of last year was when maximum forex charges were taken by companies. The Q4 y-o-y numbers could be significantly higher as compared to last year, as the base effect will play out.

Second, after the Budget, a number of companies in infrastructure and construction have become confident that the order flow will continue. So, the momentum that builds up after earnings are announced may sustain for the next two quarters. Then, we will move to the next cycle, of whether there is a normal monsoon. At least for the interim, there is a string of fundamentally sound news coming out. Mid-May 2010, you may see a lot of analysts changing their 2010-11 financial year numbers. When the upgrade cycle starts, some of them may be aggressive and take the market to the next level.

When do you see markets breaking out of this range and is there a case for India to get re-rated?
The range may change only if two things happen. One, the earnings growth trajectory suddenly becomes non-linear or exponential. This is not going to happen anytime soon. Second, if there is structural re-rating for emerging markets as a whole or if investors start saying that since India has long-term growth prospects, it needs to trade at a higher multiple.

Traditionally, developed markets used to get a premium even if earnings growth was not there and even if earnings growth was there in emerging markets, they used to get a discount. We are currently at the same multiples now. So, if India is at 16 times, the S&P 500 in the US trades around 16 times. Now, investors will question that if growth is going to remain challenged, why are we paying the premium for developed markets? And, if emerging markets have a long-term growth story, there may be a chance of re-rating of the valuation of emerging markets. That is when India could be a part of the whole re-rating process, because India has the most robust story across emerging markets, based on domestic growth and demographic dividend.

How is the global picture?
The global economy has shown incipient signs of a weak recovery. However, I don’t think we can call it normal for a long time. Eurozone as well as the US are under severe stress, in their banking industry as well as economies. The fallback option in these economies is not there, with financial services getting impacted badly. The problem is more structural, much more long-term. I think a number of countries will re-examine their growth models. With a lot of regulation, the attractiveness of these markets may have reduced.

Further, banks funded by taxpayers’ money will need to be more risk-averse. The government, on the other hand, has not been able to push anything. There is no confidence that things will turn back very quickly. With weakness in their domestic currencies, they will find purchasing power becoming more challenging. The world seems to be in for some more rebalancing. Global impact on Indian markets is likely to be only a blip, and the intrinsic value of the domestic consumption story may drive growth in India.

Commodity prices have been going up globally. Inflation, being one of its offsprings, continues to haunt the growth story. How do you see it?
Inflation is a big worry and in a country like ours, it is a bigger problem. Frankly, I do not understand why commodity prices have been going up, because the demand scenario hasn’t improved much. The US, a $13-trillion economy, is not growing. So, if consumption is not happening in the US and the Eurozone is going through similar problems, what kind of demand are we talking about?

The concerted demand we saw in 2007 for any and every commodity is unlikely to come. I don’t think commodities can keep going up, mainly because I do not see demand hitting the roof in the near future. Inflation is transient. It is also on account of the base effect but my feeling is that it may start receding by the middle of the year. We also hope the next monsoon to be normal. We could hit double-digit WPI (wholesale price inflation) for March 2010. Beyond that, it may not continue to gallop, because there are countervailing forces which will bring it down. On an average, we think WPI may settle at 6-6.5 per cent for the whole year.

What is your sector outlook?
We are quite agnostic to sectors but if I look at portfolio positioning, we are spread across sectors in a diversified sense. Some of our portfolios are underweight on materials, for the reason that commodity prices cannot be sustained for too long and we could be growing a slower pace than we have been in the last few years. We think construction equipment and infrastructure in general could do well. Public sector banks look attractive in terms of valuations. We were bullish on the consumer sector sometime back, but valuations have reached a point where we are not very comfortable anymore. Telecom has pretty significant headwinds in the short term. Return on capital is not seen in the near term, so that does not make it a very attractive asset.

There is a huge line-up of primary market issuances. Is bunching a worry for markets?
We have been conservative on IPOs (initial public offers). So, much supply of paper is not healthy for the market. I believe this could have an impact and one of the reasons why we are seeing subdued sentiment. Considering the divestment target of Rs 40,000 crore, it may weigh heavily on the secondary market. The money is coming in but it is not going into the secondary market.

Source: http://www.business-standard.com/india/news/%5Cindia-hasmost-robust-success-story-across-emerging-markets%5C/388706/

Axis in Market Share ‘Grab Mode’ Aims to Triple Assets in India

Axis Asset Management Co., backed by India’s third-largest non-state bank, plans to triple its assets over the next year as it aims to become one of the nation’s top 10 money managers.

Funds under management may rise more than threefold to 100 billion rupees ($2.2 billion) by March 31, 2011, Chief Executive Officer Rajiv Anand said in an interview in Mumbai yesterday.

Anand, who targets making Axis one of the top 10 equity asset managers in the nation over the next few years, said he’ll consider acquiring rivals. Axis posted the biggest increase in assets under management last month among Indian money managers, according to data compiled by Bloomberg, with funds climbing 42 percent to 37.5 billion rupees in February.

“We are in market share grab mode,” Anand, 44, said. “We expect our growth to be quite steep over the next couple of years.”

India’s mutual funds industry has gained fivefold in size in as many years, with assets under management swelling to 7.8 trillion rupees in February, according to data compiled by Bloomberg. India’s 1.1 billion people, almost half of whom are under 25 years old, are spending more on electronics, clothes and cars as incomes grow in the world’s second-fastest growing major economy.

Expanding Equities

Axis Asset Management, which has more than doubled its team to 100 people since it started operations last year, may increase hiring by 10 percent to 15 percent over the next two years, Anand said. The money manager aims to have 10 million customers by March 2012 as it seeks to tap the clients at almost 900 Axis Bank Ltd. branches across India. Axis Mutual Fund currently has 150,000 customers.

“Being a bank-sponsored mutual fund clearly helps, so we are leveraging that to grow the business,” said Anand.

Axis has five funds including two money market plans, two equity funds and a debt fund. The company is awaiting approval from the regulator to start two new plans. The money manager, which has about four percent of its assets in stocks, expects the share of equities and equity-linked products to rise to 30 percent of assets over the next year.

Source: http://www.businessweek.com/news/2010-03-15/axis-in-market-share-grab-mode-aims-to-triple-assets-in-india.html

Top investors scoop up tax-free bonds

Affluent investors had a couple of rare debt offerings to save on income tax this year. After a brief interval, the Indian Railway Finance Corporation (IRFC) mopped up close to Rs 2,000 crore by issuing tax-free railway bonds. This tax season also witnessed placement of two 54-EC capital gains bond issues by REC and NHAI, which together raised around Rs 2,300 crore.

The two ‘mega bond’ issues have attracted money from affluent investors who otherwise invested in mutual fund tax savers and ULIPs to save tax, according to wealth managers. The tax-free railway bonds got fully placed — collecting a little over Rs 1,900 crore — in just about three hours’ time, according to distributors. IRFC has pegged the coupon rate on bonds between 6.5% and 7.25% a year depending on the tenure (5-year, 7-year and 10-year-term available) of the tranche.

“The railway bond was a private placement issue, distributed among high net worth investors and a few corporates having large long-term cash surpluses,” said Ashish Agarwal, executive director, AK Capital, the manager to the issue.

“More money came into the 10-year bucket. Investors don’t have worries investing for longer term, as these are tradable bonds listed on exchanges,” Mr Agarwal added. According to wealth managers, the bonds are also used as collateral to raise money from the market.

IRFC has started the borrowing programme to fund its rolling-stock acquisition plans and meet rail modernisation expenditure. There are complaints that the railway bond issue was not advertised among retail investors in a big way. “Though the minimum investment limit was Rs 10,000, the issues were not given to retail investors. Most wealth managers were accepting investments of over Rs 2-3 lakh,” said a Mumbai-based independent finance analyst.

Tax-saving 54-EC capital gains bond issue by REC and NHAI also got a strong response from affluent investors. According to January figures, REC collected about Rs 500 crore, while NHAI raised over Rs 1,800 crore by way of capital gains bond issues. The issue had failed to attract buyers last year — issued towards the last months of the fiscal — as a result of the slump in real estate sector.

In ’08-09, NHAI had raised Rs 1,630 crore against a target of Rs 3,000 crore. In ’07-08 and ’06-07, it had collected Rs 305 crore and Rs 1,500 crore, respectively, according to distributors’ logsheets. Falling real estate prices had brought down investments in capital bonds by about 30% during ’08-09, wealth managers said.

“Popularity is rising gradually for capital gains bonds. It will be even better next year, when property owners sell their asset at higher prices, assuming real estate price hold steady over the next one year,” said Harish Sabharwal, chief operating officer, Bajaj Capital.

Under income-tax laws, one can save on payment of capital gains tax if the amount is used for repurchase of property within a 12-month period. Alternatively, capital gains tax can be avoided by investing in capital gains bonds. These bonds bear a coupon rate in the range of 6.15 and 6.25%.

Source: http://economictimes.indiatimes.com/markets/analysis/Top-investors-scoop-up-tax-free-bonds/articleshow/5683811.cms

UTI MF Declares Dividend for Dividend Yield Fund

UTI Mutual Fund has declared dividend on the face value of Rs 10 per unit under dividend option of UTI Dividend Yield Fund. The record date for the dividend has been fixed as 17 March 2010.

The quantum of dividend will be 5% (Rs. 0.50 per unit) as on the record date. The NAV for the scheme was at Rs 14.22 per unit as on 10 March 2010.

UTI Dividend Yield Fund is an open ended equity oriented scheme, which has the investment objective to provide medium to long term capital gains and/or dividend distribution by investing predominantly in equity and equity related instruments, which offer high dividend yield.

Source: http://profit.ndtv.com/2010/03/12103551/UTI-MF-Declares-Dividend-for-D.html

IDFC Fixed Maturity Plan - Quarterly Series 55 - Plan A Floats On

IDFC Mutual Fund has launched a new fund named as IDFC Fixed Maturity Plan - Quarterly Series 55 - Plan A, a close ended income scheme. The scheme shall mature on 22 June 2010. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue is open for subscription from 12 March and closes on 18 March 2010.

The investment objective of the scheme is to seek to generate income by investing in a portfolio of debt and money market instruments maturing before the maturity of the scheme.

The scheme offers two options viz. growth and dividend option.

The scheme will allocate up to 100% of assets in debt and money market instruments with low to medium risk profile. Investment in securitised debt would be up to 50% of net assets of the plan(s). Investments in derivatives, foreign securities and stock lending would be nil.

The minimum application amount is Rs 10000 and in multiples of Rs 10.

The fund seeks to collect a minimum subscription (minimum target) amount of Rs 1 crore under the scheme during the NFO period.

Entry load and exit load charge will be nil for the scheme.

Benchmark Index for the scheme is CRISIL Composite Bond Fund Index.

The scheme will be managed by Mr. Anupam Joshi.

Source: http://profit.ndtv.com/2010/03/12113551/IDFC-Fixed-Maturity-Plan--Qua.html

Check out some top ELSS funds

Equity-linked savings schemes (ELSS) are said to be good for investors with a long-term investment horizon. ELSS gives an additional advantage of saving tax u/s. 80C, apart from maximizing growth potential by investing in a portfolio of high-quality stocks.

Investment in an ELSS fund leaves the investor with a disposable surplus (amount of tax saved, Rs 30,900 for highest tax bracket) which, if re-invested, can add substantially to the wealth created.

Here we take a look at some top ELSS schemes on the basis of their performance during the last three years:

Taurus Tax Shield - Growth
Since its inception on March 31, 1996, the fund has shown capacity to generate wealth. Across the time period of 3 months & above, the fund has consistently outperformed its benchmark (S&P Nifty), generating an annualised return of 27.81% in the last 3-year period while in the said period its benchmark has given 13.69% growth (as on Mar 5, 2010).

The fund is being managed by Mohit Mirchandani since January 1, 2010. In the last 3 months, it has maintained healthcare as its top sector with 14.67% of the total portfolio amount being allocated to this sector. As on February 28, 2010, its top 10 stocks constituted 29.39% of the total portfolio value. It has diversified its portfolio by investing across the sectors and its top 5 sectors are healthcare, financial, engineering, services and FMCG, with a total allocation of 54.02% of the total portfolio. It is currently holding 18.71% of the portfolio in cash & cash equivalents.

Canara Robeco Equity Tax Saver Fund
The fund has registered an annualized return of 23.03% in last 3 years. It has been in existence for the last 17 years and was launched with an objective to invest 85% to 95% of the corpus into equities, and its exposure to money market instruments was not to exceed 15%. The fund manager follows 'Growth' style of investing by diversifying his portfolio in large cap and mid cap stocks. Since March 2009, it has maintained an average equity allocation of ~90%, with the remaining portion being held as cash or investment in debt instruments or both.

The fund's NAV has generated an absolute return of 138.63% in the last 1 year and has outpaced its benchmark index BSE 100, by ~31 percentage points. The fund in the 3 month & above period has consistently out-performed its benchmark. The fund has diversified its portfolio into 52 stocks across various sectors with top 5 sectors (financial, energy, services, technology and healthcare) constituting 74.15% of the total portfolio.

Religare Tax Plan
The fund in the 3 month & above period has consistently outperformed its benchmark index S&P CNX Nifty, registering an annualised return of 20.53% in the last 3 years while in the stated period Nifty has given 12.47% return.

The fund was launched on December 29, 2006, with an investment objective to generate long-term capital growth from a diversified portfolio of pre-dominantly equity and equity-related securities. It is being managed by Vetri Subramaniam since December 16, 2008. It has diversified its portfolio by investing in 51 stocks as per February portfolio with top 10 stocks constituting 33.02% of the portfolio. Since September 2009, Reliance Industries has been the favorite pick of the fund manager.

Sahara Tax Gain Scheme
The fund is being managed by A N Sridhar and was launched in April 1997. The fund in the longer time horizon has consistently out-performed its benchmark (BSE 200) and has also surpassed its peer group performance by registering an annualized return of 20.05% in the 3-year period surpassing its benchmark by ~7 percentage points.

It has invested in around 30 stocks in the last 3 months.

DSP Black Rock Tax Saver Fund
The fund has registered an annualized return of 18.59% in the last 3 years.

Banking sector, a favored sector in the past rallies, does figure as the top sector even in the recent portfolio. Its Top 5 sector picks constitute both growth-oriented and defensive sectors.

The fund in the 3 month & above period has consistently given an above average performance as compared to its peer group and has also outperformed its benchmark index (S&P CNX 500 Equity Index) in the stated period, registering an annualized return of 18.59% in the last 3 years while its benchmark could register a growth of 12.47%.

It has a beta of 0.82 and generated a Sharpe ratio of 0.29 as per the fund's latest records.

Sundaram BNP Paribas Tax Saver Fund
It has generated an annualized return of 18.07% in the last 3 years as on March 5, 2010.

In the long term, i.e. 2 years, 3 years and 5 years, the fund has given an above average performance as compared to its peer group and has also bettered the performance given by its benchmark (BSE 200), registering an annualized return of 18.07% in the last 3 years. It has shown a reasonable track record in containing downsides and has almost on all occasions given at par or better performance than its benchmark during the uptrend in the market, barring the recent upswing which may be attributed to the cash levels held by the fund.

Fidelity Tax Advantage Fund
It has consistently given an above average performance as compared to its peer group in the 1 month & above and has also outperformed its benchmark BSE-200, registering a return of 17.03% in the 3-year period while the peer group average has been 15.39% with its benchmark giving a return of 13.49%.

The fund manager follows a buy and hold strategy and true to the Fidelity philosophy of bottom-up stock picking, has been focusing entirely on the strengths of the company. It is being managed by Sandeep Kothari who has total work experience of 13 years and has been managing this fund since July 2006. In 1-year period, it has under-performed its benchmark but by only ~4 percentage points, which may be attributed to the major allocation to large cap stocks as mid and small cap stocks had rallied in the recent uptrend. Major portion of the portfolio is in large cap stocks with very little exposure to mid & small cap stocks.

It has currently diversified its portfolio in to 40 stocks with energy, financials, technology, construction, metals forming the core of the portfolio with 61.38% of the total portfolio going to these sectors.

Franklin India Tax Shield Fund
In the last 3 years, it has generated an annualized return of 16.88%.

Investors with a medium to lower risk appetite may consider investing in this fund as its large cap stock exposure helps in containing downside. But this also reduces the prospects of huge growth in the short term. In the long run, the fund has shown the capacity to generate above average returns.

HDFC Tax Saver Fund
In the last 3 years, it has generated an annualized return of 16.20%. In the 3 months and above, the fund has outperformed the benchmark and has also delivered an above average performance, registering an annualized return of 23.02% in the 5-year period while the benchmark generated an annualized return of 20.38%.

The fund was launched on March 31, 1996 and is being managed by Vinay Kulkarni since November 2006. It follows an investment strategy wherein it looks to invest in stocks irrespective of the market capitalization to take advantage of the then prevailing market conditions. It has been in existence for almost 13 years and has consistently been giving good performance.

Banking sector, a favoured sector in the past rallies, does figure as the top sector in the February portfolio and a set of defensive sectors such as pharmaceuticals, software and consumer non-durables have figured in prominence too.

ICICI Prudential Tax Plan
In the last 3 years, the fund has registered an annualized return of 16%. It has been a consistent performer throughout surpassing the benchmark (S&P CNX Nifty) by 59.18% in the last 1 year by registering a return of 158.38%. The fund invests in stocks irrespective of the market cap and its stellar performance in the last 1 year may be attributed to the exposure to mid cap stocks.

(Note: Funds which have been in existence for at least 3 years have been selected and the ranking is on the basis of performance in the last 3 years as on March 5, 2010. Disclaimer: Past performance may or may not be sustained in future. Please read the Offer Document/scheme information document carefully before investing. This is prepared for general information purposes only and should not be construed as an offer or solicitation of an offer for purchase of any of the funds mentioned. It does not consider the investment objectives, financial situation or particular needs of the recipient. The contents are based on publicly-available information and are not intended to provide professional advice and should not be relied upon in that regard.)

Source: http://economictimes.indiatimes.com/articleshowpics/5668929.cms

Birla Sun Life picks pharma, media, chemical; sells metal

Birla Sun Life Asset Management Company enhanced its exposure in the pharmaceuticals, media & entertainment and chemicals sector. However, it slashed its exposure in metals & mining, manufacturing and food & beverages sector.

SpiceJet, Sun TV Network and Chambal Fertilisers were the top buys, while Ballarpur Industries, Punj Lloyd and Balrampur Chini Mills were the top sells.

A study of the Birla Sun Life Asset Management portfolio for the month of February 2010 showed that in the pharmaceuticals space, it bought Cipla, Divis Laboratories and Aurobindo Pharma. However, it sold Biocon and exited Glenmark Pharma. (View - All Bulk Deals by Mutual Funds.)


In the media & entertainment space, it purchased Sun TV Network and DB Corp, while sold HT Media, Zee Entertainment and Balaji Telefilms. It also exited Zee News.

The fund bought Chambal Fertilisers, United Phosphorous and Castrol India. It also introduced Asian Paints in the chemicals sector. However, it sold Coromandel International and Berger Paints. (Check out - Which sectors are attracting Fund Managers?)

The selling pressure was seen in the metals & mining segment, where it sold Sesa Goa, Tata Steel and Hindalco Industries. However, it purchased Welspun Gujarat and Usha Martin.

The fund sold Jain Irrigation Systems, Ballarpur Industries and Bharat Electronics in the manufacturing pack. But it bought Phoenix Mills.

In the food & beverages sector, it sold Balrampur Chini Mills, Shree Renuka Sugars and Triveni Engineering. It also exited Bajaj Hindusthan in the same space. While it bought United Spirits, Mcleod Russel and Nestle India.

Source: http://www.moneycontrol.com/news/mf-analysis/birla-sun-life-picks-pharma-media-chemical-sells-metal_446089.html

IDFC Capital Protection NFO

IDFC Mutual Fund has announced the launch of its IDFC Capital Protection Oriented Fund Series-1 which is a three year close ended fund.

The fund would invest up to 100 per cent in debt securities and money market instruments while it would also invest up to 16 per cent in equity and equity related instruments.

The fund would initially deploy at least 84 per cent of the funds collection during the New Fund Offer (NFO) period in debt securities and money market instruments with an intention to protect the principal capital at the time of maturity of the plan.

This i
s the 12th capital protection fund in the entire mutual fund industry while the first in the IDFC fund house family.

In the words of Kenneth Andrade CIO, IDFC Mutual Fund, “Through this fund we aim to provide an attractive investment solution to the conservative investors in India who have over 46 lakh crores invested in Fixed Deposits. This fund offers an investor twin benefits of making their money grow inline with inflation while ensuring that their capital remains protected”.

The fund has been benchmarked against CRISIL MIP Blended Index. The fund would be managed by Ashwin Patni who holds B.E and PGDM degree from IIM, Calcutta. He holds over six years experience in wealth management, structured Finance, credit and market groups and business consulting. He also jointly manages IDFC Arbitrage fund and IDFC Arbitrage Plus Fund.

The Minimum application amount is Rs 5,000 and the fund offers both growth and dividend options.

The New Fund Offer (NFO) period started on February 24, 2010 and would end on March 24, 2010. No exit load would be applicable.


Source: http://new.valueresearchonline.com/story/h2_storyView.asp?str=101299

Diversified equity funds return 115% in a year

Principal Emerging Bluechip top performer with 201% returns.

What a turnaround for mutual fund investors it has been in the past one year.

Since March 9, 2009, (when markets touched their lows), when all class of investors were pessimistic about the market movement owing to the continuous flow of negative information, the markets have rebounded spectacularly, more than doubling in the period.

The average return of diversified funds was 115 per cent. Of 290 diversified schemes, 89 of them have clocked return in excess of 115 per cent and 125 of them outpaced the BSE Sensex.

For the same period the bellwether BSE Sensex moved up by 105 per cent (index on March 9, 2009 was 8160) and S&P CNX Nifty by 95 per cent.

Returns
It has been a year of golden returns for equity and mutual fund investors.

Investors who preferred to route their cash through mutual funds were laughing all the way to the bank, with some of the schemes clocking a returns of between 150 and 200 per cent.

Those who had faith in the market and bought, when others were in fear, made merry. But the return divergence was wide between the best in the diversified funds category and the worst.

Principal Emerging Bluechip was the top performer with a return of 201 per cent over the last one year.

The fund was launched in October 2008 – close to bottom of the market – and its performance was aided by sheer selection of stocks and sectors.

Others who shared the honours were Magnum Emerging Business with 193 per cent, Taurus Infrastructure and ICICI Pru Discovery with 185 per cent returns.

Among those who missed the rally were JM HI FI, Religare AGILE and HSBC Dynamic. They have let down their investors with a poor return of 45-60 per cent.

What clicked
The most common theme among the performers was that they all stayed invested during the market correction and they all had sizable exposure to mid-cap stocks.

All the “outliers” held cash less than 15 per cent of the total assets in March 2009, the period when the market was undergoing a turnaround.

They had well diversified portfolios. Most of them also invested in sectors that witnessed and indeed led a tremendously rally.

Principal Emerging Bluechip was overweight on banking, Magnum Emerging had invested 22 per cent of the assets in construction and projects, while Taurus Infrastructure was over weight on construction and power. ICICI Pru Discovery, the value fund, was overweight on banking and pharma.

Surprisingly they all have invested less in the software sector. The BSE IT index clocked 155 per cent over a one year period.

Laggards
JM HI FI was overweight on cement and invested 20 per cent of its assets there. HSBC Dynamic has invested in banks, consumer nondurables, pharma and software but what made the difference was that it had invested predominantly in large-cap stocks that rallied less than mid-caps .

Source: http://www.thehindubusinessline.com/2010/03/10/stories/2010031051631000.htm