Birla Sun Life MF Unveils India Reforms Fund

Birla Sun Life Mutual Fund has unveiled a new fund named as Birla Sun Life India Reforms Fund, an open ended equity scheme. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue is open for subscription from 10 May and closes on 9 June 2010.

The investment objective is to generate growth and capital appreciation by building a portfolio of companies that are expected to benefit from the economic reforms, PSU divestment and increased government spending.

The scheme will have dividend and growth plan. Dividend plan shall have payout and reinvestment option.

The scheme would allocate 65% to 100% of assets in equity and equity related instruments with medium to high risk profile. It would further allocate up to 35% of assets in debt and money market instruments (including securitized debt) with low to medium risk profile.

The minimum application amount is Rs 5000 and in multiples of Re 1 thereafter.

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

For units redeemed / switched out within 1 year from the date of allotment, an exit load of 1% of applicable NAV is payable. For units redeemed / switched out after 1 year from the date of allotment, no exit load is payable

Benchmark Index for the scheme will be S&P CNX 500.

The fund manager for the scheme will be Ankit Sancheti.

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

Mutual Fund investment will be inflation buster

Redemption pressures as well as entry load ban by SEBI has seen mutual fund industry sail through these hard times, but industry believes going ahead investment in mutual fund could be one big inflation buster.

“With inflation being high, the choice of beating inflation can now not be bank deposits. Investments will ultimately flow into the equity market and that would be a pull for the industry,” Jaideep Bhattacharya, UTI Mutual Fund Chief Marketing Officer told The Pioneer.

He added that with credit offtake increasing, banks are not parking much money with the mutual funds and so, we do not see much of bank money coming into mutual fund.

But in India, with only 8 per cent of savings is parked in mutual fund, there is a lot of money that needs to be harnessed. And adding salt to the injury was the ban on entry load by sebi, further demoralizing agents from selling mutual funds.

Bhattacharya said: “We have been conducting investor awareness programmes and also training our distribution channels to cope up with it, though the industry has devised their own structure.”

He further added that agents are being trained on how to move away from the transaction model to an advisory model.

UTI mutual fund in 2009-10 added a record Rs 31,463 crore asset under management and recorded 8.6 per cent growth in market share. In equity, the company recorded Rs 656 crore of net sales.

Bhattacharya said it has been an eventful year for UTI mutual fund. “We have crossed the one crore investor mark and this has been due to our continued focus on training, investor programmes and technological upgradation,” he said.

Going forward, Bhattacharya said that more and more people will allocate larger amount of money into equity.

“Systematic Investment Plan (SIP) is going to be the flavour of the year,” he said.

SIP is an instrument offered by mutual fund in which specific amount has to be invested for a continuous period at regular intervals. It is more like a recurring deposit in banks.

On asked if the company is launching any new fund, he said: “We have a large number of funds that are doing well. Going forward, we would be promoting the existent funds.”

He added that if and when we are faced with an investor need and there is a product gap, we will come out with a new fund offer.

Source: http://dailypioneer.com/254658/Mutual-Fund-investment-will-be-inflation-buster.html

MF agents flout SEBI rule on sub-brokers

Self-styled distributors, lacking basic qualifications to sell mutual fund units are advising investors as to where they should put their hard-earned money. Distributors need to pass the Amfi Advisors’ Module if they want to sell mutual fund schemes to investors.

If industry officials are to be believed, top national distributors, who sell investment products across asset classes, are not insisting on Amfi certification while appointing sub-brokers (sub-advisors or franchisees). This is more prevalent in franchisees or sub-broker offices in tier-II and tier-III cities, according to sources.

“Top distributors simply ask for a small membership fee at the time of empanelling as a sub-broker. They are not really concerned about Amfi registration or any certification. The sole criterion is how many investors you can bring into the branch,” said a fund industry source. These distributors are allowed to sell products across asset classes, from equity mutual funds to ULIPs, corporate deposits and even Nabard bonds on certain occasion.

For mutual funds, market regulator Sebi has made it mandatory for distributors to pass certification test (advisors module) and obtain registration number from Amfi. Institutions selling mutual funds have also been directed to enlist only certified advisors or product sellers. Insurance regulator IRDA also mandates advisors, including ULIP sellers, to pass the agents’ test before selling indemnity/investment products. Large-sized distributors are squarely flouting these rules while taking in sub-advisors.

The way to becoming an advisor, without taking Amfi advisors’ module test, is very simple. The aspiring advisor can just walk in to the branch of a national distributor, meet the area manager or business development head, and let them know his plan to become a mutual fund advisor. If the aspirant is well net-worked to bring in a few lakhs of rupees as investments (in mutual funds and ULIPs), branch officials collect a joining fee and hands out products to sell. If the newly-inducted sub-broker pays a higher fee, he is also allowed to use portfolio management software and product terminals owned by the distributor.

“We can only check the credentials of independent financial advisors (IFAs); it is impossible to check the certification of employees or sub-advisors empanelled with large distributors. We’ll have to go by their declaration that all advisors working for them are compliant to sell mutual funds,” said the channel head of a corporate-promoted fund house.

While fund houses are aware of this trend, they are not really worried about it. According to them, Amfi advisors’ module syllabus is outdated — sources say the syllabus was last updated in mid-2006 — and could slightly out of context, considering the large number of changes effected to mutual fund industry post-2008.

Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/MF-agents-flout-SEBI-rule-on-sub-brokers/articleshow/5910921.cms