Union KBC MF Launches Equity Fund

Union KBC Mutual Fund has launched a new fund named as Union KBC Equity Fund, an open ended equity scheme. This is the maiden launch by Union KBC Mutual Fund. The New Fund Offer (NFO) price for the schemes is Rs. 10 per unit. The new issue will be open for subscription from 20 May and will close on 3 June 2011. The scheme re-opens on 17 June 2011.

The investment objective of the scheme is to achieve long-term capital appreciation by investing substantially in a portfolio consisting of equity and equity related securities.

The scheme offers two options viz. growth and dividend option. Dividend option offers reinvestment, payout and sweep facility.

The scheme would allocate 75% to 100% of assets in equity and equity related instruments including equity linked derivatives with medium to high risk profile. On the other side it would allocate upto 25% of assets in debt and money market instruments with low to medium risk profile.

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

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

Entry load charge will be nil for the scheme. Exit load charge will be 1% if redeemed or switched out on or before completion of 1 year from the date of allotments of units. The exit load charge will be nil if redeemed or switched out after completion of 1 year from the date of allotments of units.

Benchmark Index for the scheme is BSE 100.

Ashish Ranawade will be the fund manager for the scheme.

Source: http://www.indiainfoline.com/Markets/News/Union-KBC-MF-Launches-Equity-Fund/3710414477

MF schemes that reported best and worse performance

Some of the best performers among India's fund houses and the men in blue, who won the World Cup last month, have a few things in common, consistency in performance over a sustained period and team effort.

The best fund houses in the country have been the ones whose schemes have figured in the top rankings for long even during a difficult phase. For the Indian mutual fund (MF) the going has been tough given the volatility in the financial markets and redemptions.

Stiff competition from traditional investment products that offer guaranteed returns are also weighing heavy on the industry. The weak performance of several fund schemes has also dampened investor sentiment.

ET Quarterly MF Tracker analyses some of the schemes that reported a robust performance despite uncertainties in the financial markets and also schemes that were once performing well, but are now falling out of investor favour.

SIMPLY CONSISTENT:

However, some fund houses have posted robust and consistent performance and managed to retain investor confidence.

HDFC Asset Management

Despite market swings, redemptions and investor anxiety, HDFC Asset Management has performed well. Assets under management (AUM) of the fund house have doubled in the past three years to Rs 86,282 crore even as the industry AUM has grown by barely 32%.

While HDFC did face a testing time in 2007, when most of its schemes underperformed peers, it bounced back in the very next year. The years that followed have also been very good. The astute management skills of fund manager, Prashant Jain, have helped HDFC top the Platinum rankings in the ET Quarterly MF Tracker, and also to boost fresh investments for its schemes.

Reliance Asset Management

It is India's largest mutual fund house in terms of assets under management. The fund house was the first to edge out UTI from the pole position in terms of total assets.

Reliance Asset Management has shown a consistent performance for over five years now. While the fund house came under attack for taking huge cash calls during the financial crisis of 2008, the strategy helped in terms of its assets not eroding substantially during the meltdown. After a brief inconsistent performance last quarter, the fund house seems to be gaining momentum once again.

IDFC Asset Management

With an average AUM of just over Rs 21,000 crore, IDFC does not even feature in the top 10 fund houses by size. It has, however, made a mark on the basis of sheer performance on both the equity and debt fronts.

Under the guidance of Kenneth Andrade, IDFC stands out especially in the category of mid and small-cap funds. Its schemes have done well both during a rally and also during a downturn. Two other fund houses that need a special mention for their consistent performance are DSP Blackrock and Birla Sun Life Asset Management.

While DSP Blackrock's Equity, Top 100 and Small and Midcap equity schemes have figured in the list of the most consistent performers for the quarter together, Birla Sun Life's Frontline Equity , Dividend Yield Plus and Midcap Equity schemes have boosted the fund house's credentials.

FADING OUT?
Indian fund houses have come under pressure due to lack of performance. Here are some of the fund houses that were once popular with investors but whose performance has weakened over a period.

SBI Magnum Asset Management

SBI Magnum has long enjoyed the trust of investors; especially with its flagship schemes, Tax Gain and Contra. These schemes command the highest AUM in the tax-saving and diversified equity categories, respectively, within the SBI bandwagon. Once a robust performer, SBI Magnum is struggling hard with the performances of its schemes today.

Its popular schemes such as Multiplier Plus, Emerging Businesses, COMMA and even Contra and Tax Gain have been downgraded in ratings over a period of time. There is an urgent need for the fund house to gear up and regain the glory it enjoyed under its erstwhile managers Sandip Sabharwal and then Sanjay Sinha.

HSBC Asset Management

Equity folios plunge in April

Fresh investor money coming in but less of it going into equity category.

The Indian mutual fund sector lost a little over 400,000 equity folios in April, one of the sharpest such declines in a single month.

After successfully applying brakes on the pace of loss of equity folios in the second half of the previous financial year, the MF industry is again in trouble on the growing of the equity base.

The equity folio loss in April was a little less than one-fourth of what the industry lost in all of 2010-11. In FY11, the fund industry saw an erosion of 1.8 million equity folios. About Rs 1,400 crore went out of MF equity schemes.

The Securities and Exchange Board of India (Sebi) says the number of equity folios (including equity-linked saving schemes or ELSS) stood at 38.88 million as on April 30, against 39.29 million at the end of the previous month.

The hit on the pure equity category was severe, as it declined by 2,78,000; ELSS folios shrank by 1,23,000.

WORRIES
Karan Datta, national sales head at Axis Mutual Fund, says, “The situation is not good. It is increasingly getting difficult to attract customers in the equity segment. However, it is not that fresh flow is not coming to the industry. The majority of the fresh money is getting diverted to gold and income funds, particularly the fixed maturity plans.”

More, with underperforming Indian equity markets, fund managers have raised concern over how the scenario would turn around in the coming months.

According to Navneet Munot, chief investment officer at SBI Mutual Fund, “Going forward, it would be a challenge to maintain flows in the equity segment, given the current volatility.” Vetri Subramaniam, equity head at Religare Mutual Fund, agrees. He says, “It is likely that inflows will be under pressure in a volatile market.”

This loss of folios is also in the background of the shallow penetration of mutual fund products among the country’s population — less than five per cent. Poor penetration and a majority of investment coming from only the top 10 cities has been an issue for the industry. Though investor awareness programmes and expansion in terms of reach to tier-I & II cities are on, it has not yet reflected in the industry’s assets and number of investors.

The new regime at Sebi under U K Sinha is already contemplating changes to bring relief for the industry. Sector experts say unless distributors are incentivised properly, it would remain an uphill task to increase penetration of MF products.

The overall industry’s folios also shrank in April by close to 200,000 folios as compared with 47.23 million as on March 31.

Income schemes saw the top growth in folio addition, as it increased 4.2 per cent to 4.71 million in April from 4.52 million at the end of March.

Exchange traded funds continued their momentum and the month saw a rise of 2.5 per cent in their folios, while the investor base of gold exchange traded funds was up three per cent during the month.

Source: http://www.business-standard.com/india/news/equity-folios-plunge-in-april/435668/