DLF Pramerica Mutual Fund

DLF Pramerica Mutual Fund is the latest one to receive an ‘in-principle approval’ from SEBI to start its mutual fund business in India. This is a joint venture between U.S. life insurance, Prudential Financial (PFI) and real estate company, DLF.

End of last month India Infoline received an in-principle nod from SEBI for sponsoring a mutual fund. Recruitments for the asset management business began a few months ago with the hiring of Deepesh Pandey, (ex-Deputy CIO of Mirae Asset, Singapore) and Manish Srivastava (ex-Fund Manager of Halbis - HSBC Global Asset Management- Singapore).

Ironically, the times could not have been worse. October recorded a massive liquidity and confidence crisis that sent fund houses reeling. Consequently, many fund houses are rethinking their strategy and business models.

The massive redemptions in liquid funds coupled with a tumbling equity market resulted in Assets Under Management (AUM) crumbling. Reliance Mutual Fund lost Rs 15,400 crore in its assets from the previous month (September), ICICI Prudential Mutual Fund, Rs 10,594 crore and HDFC Mutual Fund, Rs 6,519 crore. The highest percentage fall in assets was seen in Mirae Asset Mutual Fund (57%) and AIG Global Investment Group Mutual Fund (44%).

Indian Inflation reaches single-digit, touches 8.98%

Inflation for the week-ended November 1 has reached single-digit and comes at 8.98% compared with 10.72% the week earlier.

Manufacturing WPI « 0.7 week on week

Fuel and power «3.4 week on week

Naphtha « 33 week on week

Aviation turbine fuel prices « 18 week on week

Zero Balance Folio from Bharti AXA

Bharti AXA introducing, Zero Balance Folio. Investors can now have all the paperwork done before investing. A Zero Balance Folio is similar to a Zero Balance Account in the bank where in an investor is given a Folio number, so all the hassling paperwork is done even before the actual investment starts. The investor fills an application form and the Registrar creates a unique Folio after submission of necessary document for the investor even before any financial transaction takes place. In addition he also gets a (Customer ID), which is the same as his mobile number and can be used for any investor related queries.

Benefit of Zero balance folio:

1) Helps you increase your customer base
2) Helps complete the required paperwork much in advance
3) Keeps the investor ‘investment-ready’
4) Provides for the mobile number to be the ‘Customer ID’, hence ensuring ease of use
5) Provides value added services / updates

Dabbawalas double up as mutual fund distributors

The extensive network of 'dabbawalas', who supply lunch to thousands of Mumbaikars daily, doubled up as salesmen for UTI Mutual Fund for three days, as a part of the mutual fund major's new marketing initiative.

The dabbawalas, while delivering lunch 'dabbas', simultaneously also handed out UTI MF's forms to their customers.

The marketing campaign, that lasted for three days beginning Monday, ended on Wednesday

"Around 5,000 dabbawalas took part in the activity. In the future as well, we would be pleased to be involved in such initiatives," Nutan Mumbai Tiffin Box Suppliers' President Raghunath Medge said here

The dabbawalas wore UTI MF T-shirts and were trained by the company in the modalities of handing over the mutual fund forms to around 1,00,000 of their daily customers.

"We had been asked to distribute the forms and we got some amount of money for it," Medge said

The dabbawalas have been offering their traditional services for the last 118 years and have provided a helping hand to brands like Coca Cola and Radio Mirchi earlier

Last year, Coca-Cola had sought dabbawalas' assistance in distributing free samples of its orange juice brand, Minute Maid Pulpy Orange

In 2004, dabbawalas had helped Radio Mirchi promote its morning show 'Hello Mumbai'. Over a period of four days, dabbawalas gave a dried red 'mirchi' (chilli) along with a sticker on the lunch boxes saying 'For more spice tune into Hello Mumbai'.

IDFC's Anand to head Axis Bank fund unit -sources

IDFC Asset Management's head of investments, Rajiv Anand, is likely to join private Indian lender Axis Bank's (AXBK.BO: Quote, Profile, Research) planned mutual fund unit as chief executive, two financial services industry sources said on Wednesday.

"He would be joining as CEO... by the end of January," one of the sources told Reuters.

A senior official at Axis Bank declined comment. Naval Bir Kumar, managing director of IDFC Asset Management, said Anand had not put in his papers.

Anand has more than 15 years of experience in fixed income markets.

Axis Bank is India's third-largest private-sector lender. It applied for a mutual fund licence in June and is awaiting regulatory approval

Need for SIP in Gold ETF mutual fund

Have you ever thought of SIP in GOLD ETF???????

Many of us have started SIP in gold fund which are available in market. We were very happy when NAV of gold fund going up even though equity market were correcting form Jan 2008.

Today we observed that fund sold as gold fund which have no perfect co relation with equity market. We are witnessing a once in a life time global turmoil. We have seen that prevailing gold fund is just like one sector fund, like we were typically investing in sector fund like financial services, power, IT, telecom, healthcare, auto, etc; which invest particularly in one sector of equity market.

After learning lesson from existing basket of gold fund we must look for a fund that have perfect correlation between gold price and NAV of fund. At present we do not have any mutual fund which has perfect positive co relation with price of gold.

At the same time we have gold ETF fund which have correlation with price of gold and price of one unit. But we do not have option to go for an SIP in the same.

In gold ETF investor must have a trading and demat account of his/her. Even after having trading and demat account we cannot go for SIP as there is no such option available in scheme.

We have to every time manually bought on particular day a specified amount of units. Which a normal SIP does with the help of ECS mandate or post dated cheques.

Do you feel there is a need of SIP in gold ETF in your portfolio for asset allocation? What is you say?

'MF industry to see more bailout acquisitions in coming days'

Reeling under the liquidity pressure, the mutual fund industry could see more bailout deals -- similar to the takeover of Lotus India Asset Management -- in the coming days, say industry experts.
"One or two more such kind of transactions may be seen in days ahead but that will mainly be for bailing out some problem-ridden fund houses," MF tracking firm Value Research CEO Dhirendra Kumar said.
Last week integrated financial services group Religare Enterprises announced acquiring Lotus India Asset Management, with an asset size of about Rs 5,000 crore.
According to industry sources, the Indian asset management arm of the crisis-ridden American International Group, AIG Global Investment Group Mutual Fund, which saw a fall of over Rs 1,000 crore in assets in October, is up for sale.
Besides, some more foreign fund houses are also expected to wind up their business in the near future because of losses on account of sharp meltdown of capital markets with benchmark BSE Sensex index plunging below 10,000 points from over 21,000 in January.
Religare Enterprises agreed to acquire Lotus Indian AMC from its majority shareholders, Alexandra Fund Management (an affiliate of Fullerton Fund Management Company, promoted by DBS of Singapore) and Sabre Capital.
Value Research chief Kumar said, "The outlook for the mutual funds industry remains grim for the next two years and fixed income plans would come under pressure. The days ahead will also see mutual funds reinventing themselves to be more focussed on retail investors."
According to Taurus Mutual Fund Director R K Gupta, some consolidation can happen in the coming days in the MF industry.
It is a good sign for the sector as the competition had intensified with so many new players coming into the fray, Gupta said, adding, consolidation is an ongoing exercise for any industry and enhances the growth in the industry.
However, Sahara Mutual Fund CEO N K Garg said the size of fund house has nothing to do with merger deals. Smaller MF houses, which have managed their liquidity and risk portfolios well, are doing quite good in these times as well.
Mutual fund industry has been under pressure for last two quarters and both the Reserve Bank and the Finance Ministry are ceased of the liquidity problem faced by the industry.
In order to provide liquidity to the cash-starved industry RBI last month opened a special repo window for the banks aggregating Rs 20,000 crore for on-lending to the industry.
The lackluster response from banks to pick up funds from this window forced the RBI to extend the window the limit is exhausted.
Meanwhile, mutual fund industry witnessed a 18 per cent decline in its assets under management, which plunged below the Rs 5 trillion mark in October for the first time this year.
The combined average assets under management (AUM) of the 35 fund houses in the country saw an erosion of over Rs 97,000 crore and dropped to Rs 4,31,901.42 crore at the end of October.
At the end of September, the average AUM had been Rs 5,29,102.92 crore, according to the data released by the Association of Mutual Funds in India.

Union Bank joins Belgium co for AMC

Union Bank of India and KBC Asset Management of the Belgium-based KBC group on Friday said they have signed an agreement to set up a joint venture asset management company in India.
UBI will have a stake of 51 per cent while KBC Asset Management will have a 49 per cent stake in the new company.

“This is indeed a good time to enter the mutual fund business,” said M.V Nair, Chairman and Managing Director, UBI, at a news conference here on Friday. “The current mutual fund penetration levels are just 3 to 4 per cent, clearly indicating the vast untapped potential.”
Close to 500 persons will be employed in the joint venture, he added. Union Bank to raise Rs 300 cr
“We will file for SEBI approval, and later for approval for our schemes. It will take some seven to eight months for the launch of our first product,” said Mr Erwin Schoeters, Managing Director, KBC Asset Management N.V.
Capital protected funds could be an interesting answer in the current market situation, said Mr Schoeters.
KBC Asset Management has around 55 per cent market share in Belgian market for capital-protected products, according to a press release.
More India business storiesUnion Bank of India and KBC Asset Management of the Belgium-based KBC group on Friday said they have signed an agreement to set up a joint venture asset management company in India.
UBI will have a stake of 51 per cent while KBC Asset Management will have a 49 per cent stake in the new company.

“This is indeed a good time to enter the mutual fund business,” said M.V Nair, Chairman and Managing Director, UBI, at a news conference here on Friday. “The current mutual fund penetration levels are just 3 to 4 per cent, clearly indicating the vast untapped potential.”
Close to 500 persons will be employed in the joint venture, he added.
Union Bank to raise Rs 300 cr
“We will file for SEBI approval, and later for approval for our schemes. It will take some seven to eight months for the launch of our first product,” said Mr Erwin Schoeters, Managing Director, KBC Asset Management N.V.
Capital protected funds could be an interesting answer in the current market situation, said Mr Schoeters.
KBC Asset Management has around 55 per cent market share in Belgian market for capital-protected products, according to a press release.

State-owned Union Bank of India has also announced plans for its first branch in the global diamond hub of Antwerp as it is expanding its overseas network by setting up representative offices in Australia, Oman, Canada and Indonesia. The bank has a representative office in Shanghai and a branch in Hong Kong.
State-owned Union Bank of India has also announced plans for its first branch in the global diamond hub of Antwerp as it is expanding its overseas network by setting up representative offices in Australia, Oman, Canada and Indonesia. The bank has a representative office in Shanghai and a branch in Hong Kong.