MFs looking for easing of entry load ban

Mutual fund houses had cheered news that UK Sinha, a man from the MF industry, could be the next Securities and Exchange Board of India (SEBI) chief. But CNBC-TV18’s Mitra Joshi and Gopika Gopakumar report that this appointment may not mean the end of their problems.

Hit by redemptions, dwindling assets-under-management, and a drop in folios, the mutual fund industry has been clamouring for a lifting on the ban on entry loads. It says only around one percent of the country's population invests in mutual funds and easier norms are needed, if deeper penetration is to be achieved.

HN Sinor, CEO, AMFI said, “Perhaps, this series of changes that have come about, I think it has in a way disrupted the industry. The industry could not really settle down to many of the quick changes which have come about. Ultimately, the industry has to have an orderly growth and for that we need to have proper careful regulation.”

So when UK Sinha's name did the rounds as SEBI Chief CB Bhave's possible successor, fund houses were happy. They hoped that given Sinha's MF background, SEBI would look kindly on a proposal to review the ban on entry load, among other regulatory changes. But this may be easier said than done.

KN Vaidyanathan, ED, SEBI said, “If you ask me, it is a closed chapter. It is decisively in the favour of the investor. It has brought transparency. It has improved AMC profitability.”

SEBI has also made it clear that the regulation of mutual fund distributors will happen over a period of time. This includes mandatory examinations to qualify as an impaneled and authorised distributor.

Source: http://www.moneycontrol.com/news/mf-news/mfs-looking-for-easingentry-load-ban-_518975.html

ICRA Mutual Fund Awards, 2011 announced

• MFs in 15 categories recognized in the 8th Annual ICRA Mutual Fund Awards

• HDFC Mutual Fund awarded as the Fund House of the Year in the equity category; Reliance Mutual Fund wins the Fund House of the Year award in debt category

ICRA Limited along with ICRA Online Limited (ICRON) presented the prestigious Fund House of the year, 2011 awards to HDFC Mutual Fund and Reliance Mutual Fund in the equity and debt category respectively for their outstanding performance.

At the 8th annual ICRA Mutual Fund Awards function, held in Mumbai last evening, HDFC Mutual Fund bagged the maximum number of awards with 16 in the equity category and 2 in debt category. This was followed by Reliance Mutual Fund and Birla Sun life Mutual Fund who won a total of 6 awards each. J P Morgan Mutual Fund, LIC Mutual Fund, UTI Mutual Fund, DWS Mutual Fund, Fidelity Mutual Fund, Kotak Mahindra Mutual Fund and BNP Paribas Mutual Fund were among the other prominent winners.

Speaking at the occasion, Mr. P K Choudhury, Vice-Chairman of ICRA Limited & CEO of Group ICRA, said, “I whole heartedly congratulate all the winners tonight. The fantastic growth of the mutual fund industry and its ability to reach across to lakhs of investors clearly indicates the enormous potential for the industry in the years to come and significant milestones that could be achieved as we move forward. We are clear in our mind that the Indian mutual fund industry is poised to take on emerging challenges and become a significant enabler in the greater goals of achieving financial inclusion for a majority of the population in India”.

The eighth edition of the annual event had Mr. Robert Fauber, Senior Vice President, Moody’s Corporation as the Chief Guest. Mr. D N Ghosh, Chairman, ICRA Ltd gave the welcome address, while a special address was delivered by Mr. K N Vaidyanathan, Executive Director, Securities and Exchange Board of India (SEBI) and Mr. H N Sinor, Chief Executive, Association of Mutual Funds in India (AMFI). The function was attended by a host of eminent persons from the Banking and Financial Services Industry, besides the media, and of course, members of Group ICRA.

The awards ranged from trophies for the Best Performing Mutual Fund Schemes in the country during the one- and three-year periods ended December 31, 2010, to Fund House of the Year awards in the Equity and Debt categories. In total, there were 15 categories. While the top 4.6% funds in each category qualified as 5-Star Funds, the best among these was named the 7-Star Fund. The 5-Star Funds were awarded a Certificate and a Trophy each, while the 7-Star Funds were given 7-Star Gold Awards and Certificates.

[A detailed list of the Winners of the various ICRA Mutual Fund Awards, 2011 and the associated details are available on the websites www.icraonline.com and www.mutualfundsindia.com]

About ICRA: ICRA Limited was set up in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional Investment Information and Credit Rating Agency. The international Credit Rating Agency Moody’s Investors Service2 is ICRA’s largest shareholder. Today, ICRA and its subsidiaries together form the ICRA Group of Companies (Group ICRA). ICRA is a Public Limited Company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange.

About ICRA Online: ICRON, a wholly-owned subsidiary of ICRA Limited, is a leading information services, outsourcing solutions and technology solutions provider and caters for some of the biggest names in the financial services sector in India and abroad, which is a testimony to its product quality, commitment and credibility. ICRON was incorporated in January 1999 and has over the period since then established itself as an independent and credible source of authentic information and software solutions for financial services as well as an outsourcing solutions provider.

The Ranking Methodology ICRA Mutual Fund (MF) Awards seek to inform investors and Mutual Fund intermediaries of the category-wise relative performance of MF schemes. The awards are based on the proprietary ranking methodology developed jointly by ICRA and ICRON.

For an MF scheme to be eligible for the ranking: · it must have declared its net asset values (NAVs) for one and three years (depending on the ranking horizon); · it must have made full portfolio disclosure (monthly/quarterly) during the ranking horizon; · its size should have been larger than 10% of the category’s median, average assets under management (AUM) and 20% in case of liquid and ultra short-term categories ; and · there should have been at least five schemes in the category. [Note: The ranking process considers only growth-oriented, open-ended equity and debt schemes, institutional plans are considered in liquid and ultra short-term schemes categories].

The ranking methodology dynamically focuses on the market reality, that is, on the actual investment pattern and portfolio composition of an MF scheme rather than on its stated objectives, thereby acknowledging the fund manager’s prerogative to devise and follow her/his particular investment style.

The scoring model for the final ranking takes into account: the Risk-Adjusted Returns; the Average Maturity; the AUM size; the Credit Indicators; and the Portfolio Concentration. Once the scoring is done, the MF schemes are ranked 1-Star, 2-Star, 3-Star, 4-Star, and 5-Star on the basis of their individual scores. The highest scorer among all schemes ranked 5-Star in a particular category is named the 7-Star Fund of that category, provided the fund’s AUM is above Rs. 100 core, or it is higher than the category average, whichever is lower.

The Fund House of the Year Award is given to the fund house with the best performance in its category, that is, Equity or Debt. To qualify for the Award (for either category) a fund house needs to have at least one scheme ranked 3-Star or above in at least three Debt or Equity categories, as defined by ICRA. The scoring also takes into account qualitative factors, which are assessed from the response of the AMCs to a due-diligence questionnaire administered by ICRON.

Source: http://www.business-standard.com/india/news/icra-mutual-fund-awards-2011-announced/423817/

IDFC Tax Advantage (ELSS) Fund declares dividend

IDFC Mutual Fund has announced a dividend of 25% (Rs. 2.5 per unit on Face Value of Rs.10), under the dividend option of IDFC Tax Advantage (ELSS) Fund. The record date for the dividend as been fixed as February 4, 2011.

All investors registered under the dividend option of IDFC Tax Advantage (ELSS) Fund as on February 4, 2011 will receive this dividend. The NAV of the scheme under the dividend option as on January 28, 2011 was Rs 15.514.

IDFC Tax Advantage (ELSS) Fund is an open-ended ELSS scheme. The investment objective of the scheme is to seek to generate ong term capital growth from a diversified portfolio of predominantly equity and equity related securities.

Source: http://www.moneycontrol.com/news/mf-news/idfc-tax-advantage-(elss)-fund-declares-dividend_517733.html