Canara Robeco MF Announces Change in Key Personnel

Canara Robeco Mutual Fund has announced that Mr. Soumendra Nath Lahiri has been appointed as Head - Equities of Canara Robeco Asset Management Limited. He is aged 44 and holds B.E, PGDM as his educational qualification. He has an overall experience of 21 years. In his previous assignment he has been Chief Investment Officer - PMS Equity Investment with Emkay Investment Managers Limited (January 2011 to March 2011), Chief Investment Officer - Advisory Services with Fortuna Capital (May 2008 to December 2010), Co-Head - Equities with DSP Merill Lynch Investment Managers Private Limited (June 2004 to March 2008) and Head - Equities with Dolat Capital Market Private Limited. (September 1995 to May 2004).

Change in Fund Management Responsibilities

Soumendra Nath Lahiri will manage Canara Robeco Emerging Equities, Canara Robeco Multicap, Canara Robeco Nifty Index, Canara Robeco Equity Diversified, Canara Robeco F.O.R.C.E Fund, Canara Robeco Infrastructure, Canara Robeco Equity Tax Saver, Canara Robeco Large Cap + Fund, Canara Robeco Balance and Canara Capital Protection Oriented Fund - Series 1 - 36 Months (Plan A).

Ritesh Jain will manage Canara Robeco Monthly Income Plan.

Akhil Mittal & Suman Prasad will manage Canara Robeco Dynamic Bond Fund, Canara Robeco Treasury Advantage Fund, Canara Robeco Gilt, Canara Robeco Short Term Fund, Canara Robeco Liquid and Canara Robeco Floating Rate. The changes will be effective immediately.

Source: http://www.adityabirlamoney.com/news/468567/10/22,24/Mutual-Funds-Reports/Canara-Robeco-MF-Announces-Change-in-Key-Personnel

Kotak Group Expands U.S. Presence with Launch of its First U.S. Mutual Fund

Kotak Group, one of India's leading diversified financial services providers, continues to build its U.S. presence with the launch of the first U.S. mutual fund from an India-based firm. The ALPS Kotak India Growth Fund seeks to achieve long-term capital appreciation by investing in large-cap, mid-cap and small-cap Indian companies with high growth potential, and is intended to provide U.S. retail and institutional investors with an opportunity to gain broad exposure across all key sectors of India's large and growing economy. ALPS Advisors Inc., will serve as the Fund's investment advisor while Kotak Mahindra (UK) Limited, a subsidiary of the Group's flagship Kotak Mahindra Bank, will act as sub-advisor and will manage the Fund's investment portfolio.

"The launch of the ALPS Kotak India Growth Fund is a natural next step in the expansion of Kotak Group's business and presence in North America," said Ravilochan Pola, CEO and President of Kotak Mahindra Inc., the Group's North American arm based in New York. "Launching our first U.S. fund leverages the Groups strong asset management and India equities research capabilities to provide U.S. investors with an opportunity to potentially benefit from the insights and perspective provided by an Indian financial institution with vast fund management experience, deep roots and nationwide presence in India."

Kotak Mahindra (UK) Ltd.'s Nitin Jain will serve as principal Portfolio Manager for the Fund and will oversee a team of fund managers and analysts seeking to identify the most attractive growth companies among India's top listed companies representing all levels of market capitalization and across all sectors. "The India growth story is a multi-faceted one, driven by a number of key, sometimes inter-related themes and trends, including demographic led growth in consumption, expansion of the financial sector, massive investment in infrastructure, continued growth in India's role as an outsourcing center and the cyclical impact of commodities," explained Mr. Jain. "The Fund's investment strategy reflects this dynamic macroeconomic environment and our flexible multi-cap, cross-sector approach is intended to maximize returns and lower volatility on behalf of our investors."

The ALPS Kotak India Growth Fund is distributed by ALPS Distributors, Inc. and is currently available through Oppenheimer & Co., Commonwealth, Credit Suisse, Fidelity, JP Morgan, Pershing, Schwab and TD Ameritrade.

About The Kotak Group

The Kotak Group is one of India's largest diversified financial services providers with significant operations in commercial banking, retail banking, asset management, stock broking, insurance and investment banking. With offices in London, New York, Santa Clara, Singapore, Mauritius and Dubai, the Kotak Group has nearly $11 billion in assets under management, including $2 billion in assets from non-Indian investors. Kotak manages a broad range of onshore and offshore funds across all assets classes. The Group employs more than 20,000 people and serves more than 8 million customers in India and around the world.

Incorporated in the United Kingdom and authorized and regulated by the Financial Services Authority in the United Kingdom, Kotak Mahindra (UK) Limited (KMUK) is a member of the London Stock Exchange and is registered with the Securities Exchange Board of India as a Foreign Institutional Investor. KMUK has branch offices in Singapore and Dubai that are regulated by the Monetary Authority of Singapore and the Dubai Financial Services Authority respectively. KMUK is also registered as an investment adviser with the Securities and Exchange Commission in the U.S.

About ALPS

Headquartered in Denver with offices in Boston, New York, and Seattle, ALPS is a twenty five year old financial ser vices firm focused on asset services and asset gathering. Now with more than 300 employees, nearly 200 clients, and an executive team that's been in place for over 15 years, ALPS continues to actively promote all of its various business segments, from asset servicing through ALPS Fund Services, Inc. to asset gathering through ALPS Distributors, Inc. and ALPS Advisors, Inc. As of December 31, 2010, the firm manages more than $2.7 billion in assets and provides servicing to more than $288 billion in client assets. For more information about ALPS and the services available, visit www.alpsinc.com, and for additional information about ALPS products, visit www.alpsfunds.com.

Source: http://www.moneylife.in/prnews/kotak-group-expands-us-presence-with-launch-of-its-first-us-mutual-fund/201104111015PR_NEWS_USPR_____NY80640.html

For the passive investor

Taking the ETF or index fund route makes sense. But there are costs involved for opening a demat account and trading through a broker.

Thirty nine-year-old Sanjay Jadhav has been contemplating investing in the equity markets for sometime now. But he is unsure how to go about it. One, he lacks the expertise for stock-picking. Two, he does not want to track stocks prices or mutual fund net asset values on a regular basis. For someone like Jadhav, Hemant Rustagi, CEO, Wiseinvest Advisors, advises exchange-traded funds (ETFs) and index mutual funds. Both track the broader benchmark indices and deliver returns that closely match their performance. The fund manager has a limited role to ensure that the selected stocks work as efficiently as the index these mirror.

Among the two, ETFs stand a better chance of beating the index because of their lower tracking errors. Over the last one year, index ETFs have outperformed both the Sensex and Nifty. Index ETFs have given an average of 11 per cent as compared to the Sensex’s 9.81 per cent returns. During the same time, ETFs tracking Nifty returned around 10.39 per cent while S&P CNX Nifty’s returns were pegged at 10.13 per cent. Also, equity largecap funds gave 9.9 per cent returns.

“Investors, who would like to diversify within this asset class itself, could look at sectors funds or ETFs. “However, these will always carry the risks associated with the sector,” warns Rustagi.

Those with long-term outlook could include gold ETFs to balance their portfolio, says Hiren Dhakan, associate fund manager, Bonanza Portfolio. “Once you are already invested in equity, investing five-seven per cent of your portfolio across a different asset class could be looked at,” adds Dhakan. Gold ETFs have given over 20 per cent returns during the last year.

For those planning to diversify globally, Dhakan’s advice is to stay away from markets that are similar to the Indian markets. So, one could avoid other emerging markets indices such as the Hang Seng Benchmark ETF, and opt for the ETFs tracking other developed markets like the Nasdaq. Of course, one must not forget the exchange rate risk involved in investing in global funds.

COSTS INVOLVED
Both index funds and ETFs have lower costs as compared to active mutual funds, since these do not spend on research and other operating costs. While an active mutual fund will charge 2.25 per cent annually, management fees for an index fund is 1.5 per cent and for an ETF will be one per cent.

However, unlike index funds, which can be bought and sold from fund companies, ETFs are traded on exchanges through a broker. So, one needs a demat account to buy and sell ETFs.

It means one would be paying brokerage and demat maintenance charges, in addition to the ETF management fees. In case of selling unit of the index fund before a year, there would be an exit load of one per cent.

TAX ON TRANSACTION
Both ETFs and index funds get the same tax treatment as the other equity mutual funds. So, while the Securities Transaction Tax applies to both, there is no long-term capital gains tax on these. The short-term capital gains tax is 15 per cent.

Source: http://www.business-standard.com/india/news/forpassive-investor/431871/

Use simple, less risky products to woo investors: SEBI to MF cos

Capital market regulator SEBI today asked mutual fund companies to come out with simple and less riskier products to enhance retail participation, even as it considered increasing investor awareness about mutual fund investment as the biggest challenge for the industry.

"We are trying that the Mutual Fund companies should launch easier, cheaper and less riskier products to transact ... to involve more people in Mutual Fund segment," SEBI Executive Director KN Vaidyanathan said while delivering a talk on 'Mutual Funds: Opportunities and Challenges'.

The total assets size of Mutual Fund sector in the country is pegged at over Rs 6 lakh crore, constituting 40 per cent of retail investments, while the rest is with institutions and large investors.

Noting that there was enough headroom for Mutual Fund segment to grow, Vaidyanathan said creating investor awareness about the mutual fund sector has been the biggest challenge before the regulator.

"Not many people trust MF segment... it is the biggest challenge before us," he said.

Vaidyanathan said banking sector gets 55 to 60 per cent of total savings in the country, the insurance industry attracts 30-35 per cent, while Mutual Funds segment gets only 10-15 per cent of savings.

According to the SEBI Executive Director, about 3-4 lakh crore was annually pumped into banking, followed by Rs 1.5 lakh crore in insurance (excluding ULIP) and just Rs 25,000 crore was invested in to MF sector.

While dwelling upon steps taken by the SEBI to make MF as investor-centric industry, Vaidyanathan said that abolition of entry load on MF products had yielded Rs 2,500 crore to the investors in just 20 months.

"Amount of entry load saved is Rs 2,500 crore in just 18-20 months...this is possibly the biggest benefit investors have got," he said.

SEBI abolished entry load on MF products varied between 2-5 per cent in August 2009, much to the discomfort of the distributors.

Later when asked if SEBI was framing any guidelines for regulating the wealth management business after the much publicised Rs 450 crore-Gurgaon Citi Bank fraud, he said, "the work is in progress", but refused to put a timeframe in this regard.

When asked about allowing foreign investment into MF industry, he said, "rules are being worked out and that should not be too far away."

Source: http://articles.economictimes.indiatimes.com/2011-04-09/news/29400681_1_entry-load-mf-sector-kn-vaidyanathan

We expect a downgrade in EPS of Sensex basket - UTI AMC

Mr Harsha Upadhyaya is Executive Vice-President and Fund Manager, UTI Asset Management Company. He has been managing funds at UTI AMC since 2006. He manages an AUM in excess of Rs 4,000 crore across five funds. In an interview to Business Line, he gives insights into various issues related to the equity market.

Where is the stock market headed?

The current rally is purely driven by FII flows. Fundamentally no economic indicator has changed. Crude is at $124 a barrel and unlikely to sustain at these levels for long.

Reallocation of Japanese assets across emerging markets could be one of the reasons. In the short term, markets are expected to be range bound with some downside if liquidity flow reverses. The worst case scenario for GDP growth is 7 per cent.

What about valuation?

We expect a 5 to 6 per cent downgrade in the EPS of the Sensex basket that is currently at 1,274. The key issue is whether the money into India will keep coming despite all the negatives. However, the second half will be much better than the first half.

If monsoon is normal, inflation will cool off. Interest rate scenario will change. But the market would remain range bound for the next couple of quarters.

What do you expect from the FY11 earnings season?

We expect a 11 to 12 per cent for Q4 FY11 over the corresponding quarter of last year, i.e. Q4 FY10.

What is your take on the capex plans of corporates in the coming fiscal?

We expect capex to pick up in the second half of this fiscal.

There is always a hesitation to undertake capex during a hardening interest rate regime but that should change in the second half.

What has been the incremental AUM addition to your schemes?

Take the case of UTI opportunities fund that has a long-term focus. We have seen 15 per cent incremental AUM additions and its AUM is now Rs 1,600 crore.

The fund has been consistently outperforming its benchmark — the BSE 100 — since 2007 and it is this consistency and acceptability that has led to the inflows.

What is the frequency with which you churn and what are your cash levels as a percentage of AUM?

We are comfortable with an average cash level of 4 to 5 per cent. We prefer to churn rather than take cash calls. Our frequency of churn including derivatives is 0.9 (less than one) and 0.6 if derivatives are excluded.

Do you write options?

We never did options. Given the kind of investor base and profile that we have, we have restricted ourselves.

We do arbitrage in cash and futures and would continue to do that and would not like enter into derivative transactions that most of our investors do not understand.

What sectors are you looking at going forward?

Our current portfolio has 20 per cent exposure to FMCG, 15-16 per cent in banking and energy distribution and 7 to 10 per cent in cement, IT, auto and auto ancillary. We are underweight on banking and have brought down our exposure from 24 to 16 per cent because of the margin pressures that banks are expected to face.

We usually follow a 70:30 allocation pattern, 70 per cent in large caps and 30 per cent in good quality mid caps.

Source: http://www.thehindubusinessline.com/markets/stock-markets/article1688885.ece

Money moves out of MF income plans

Volatile interest rates over the past year with a rising trend resulted in money flowing out of mutual funds income and liquid schemes in 2010-11. According to the data provided by the Association of Mutual Funds in India (Amfi), income and liquid schemes saw redemptions of over R40,000 crore while equity schemes witnessed outflows of approximately R13,400 crore. Meanwhile, after a gap of three months equity schemes once again witnessed redemptions in March with investors profit booking after the rise in equity markets. The Sensex rose 9.1% while NSE gained 9.38%.

Birla Sunlife AMC CEO A Balasubramanian said, “The reasons for income schemes seeing withdrawals was the rising interest rate scenario.” Sundaram MF head fixed income Dwijendra Srivastava said, “From the very beginning of 2010-11 there were problems like tight liquidity conditions, followed by the 3G and BWA auctions during which the banks and corporates pulled out money from income schemes.”

In June last year, debt funds saw redemptions of over R1.17 lakh crore while the highest outflows took place in March 2011 when R1.28 lakh crore moved out with companies paying advance taxes.

In July Sebi asked fund houses to mark to market debt and money market securities with a maturity up to 91 days whereas earlier this practice has been applicable to securities with a tenure of 182 days. That caused some amount of volatility in NAVs which some investors were averse to. Birla’s Balasubramanian points out, “The new regulation did not have much of an impact on liquid schemes and they delivered a strong return of 8% during 2010-11.”

Canara Robeco MF head investments Ritesh Jain said, “In the last few months banks have upped FD rates making it attractive for savers. As such, lot of liquid money moved into FDs which could be one of the reasons for the redemptions.”

Last year was a difficult one for equity schemes with only four months seeing inflows and the month of September witnessing record outflow sof R7,000 crore.

“Investors are investing in equity schemes through systematic investment plans (SIPs). But still there is lack of participation from the distributors due to lack of commission and as markets are going up we are witnessing outflows,” said a senior official form the leading fund house.

Source: http://www.financialexpress.com/news/money-moves-out-of-income-plans-on-rising-interest-rates/774833/0