Debt funds drive record growth in MF assets

Buoyed by significant growth in debt funds, the mutual fund industry's total asset under management in January rose to rose 9.4 per cent, the highest monthly growth in 15 months.

According to the fund evaluation and risk solutions provider Crisil FundServices, the assets of mutual funds increased significantly in debt funds.
The various categories including bonds, gilts and liquid funds, collectively witnessed their net inflows surging to Rs 67,000 crore in January from Rs 1,150 crore in December.
"The growth in AUM was despite weak equity markets, and on account of strong inflows in debt funds. The current outlook of declining interest rates makes debt funds a popular investment option," the report stated.
The total AUM of the country's 35 mutual fund houses have risen to Rs 4,60,949 crore, following an increase of Rs 39,833 crore, or 9.4 per cent, at the end of January, according to the data of the Association of Mutual Funds in India.
"This is the second consecutive month of growth after the industry witnessed steady de-growth from September 2008 to November 2008," Crisil FundServices said.
Of all the fund categories, the bond funds witnessed the highest inflow of Rs 39,100 crore in January, from Rs 4,500 crore in December.
Liquid or money market funds saw net inflows of Rs 27,100 crore against net outflows of Rs 4,300 crore in December.
According to Crisil, on an aggregate while the equity funds witnessed marginal net outflows, the Equity-Linked Savings Schemes (ELSS) saw net inflows owing to increased investments driven by tax planning requirements.
Also net inflows from all categories for the industry as a whole increased to Rs 66,800 crore in January 2009, from negligible levels in December 2008.
Although the overall MF industry saw an increase in AUMs, 22 of the 35 fund houses reported growth in average AUM.
Country's top house Reliance Mutual Fund saw its AUM rise by Rs 5,960 crore in January to Rs 76,168 core. HDFC MF remained the second big fund house with an addition of Rs 4,663 crore in its AUM at Rs 51,421 crore at January end.
ICICI Prudential Mutual Fund toppled state-run UTI MF as the third largest fund house of the country with an AUM of Rs 47,515.51 crore, after adding Rs 5,638 crore in a month.
According to Crisil although Reliance MF and ICICI Pru MF recorded maximum growth in asset in absolute terms, in terms of rate-of-growth LIC MF and IDFC MF stole the show.
"In terms of rate of growth, reflected in month-on-month growth percentage of average assets, LIC MF and IDFC MF were the leaders, registering 30 per cent and 29 per cent growth in average AUM respectively, between December 2008 and January 2009,"

Source: http://www.business-standard.com/india/news/debt-funds-drive-record-growth-in-mf-assets/18/33/55294/on

Top fund managers may quit JM Financial

There is considerable uncertainty over the fate of the top fund team at JM Financial Mutual Fund. People familiar with the matter said strong difference of opinion had developed between the promoters and the fund management team on account of the promoters’ displeasure about the performance of equity funds and other investment decisions.

As a result of these differences, chief investment officer Sandip Sabharwal and sales and marketing head, Bhanu Katoch may leave the firm, according to a number of market participants with knowledge of the matter. A JM spokesperson denied this, saying, “Sandip and Bhanu are very much with JM Financial. These are rumours and there is no truth in it.” Mr Sabharwal strongly denied any such possibility, saying, “this is untrue.”

When contacted, a top JM official said: “Mr Sabharwal has not left the firm and I am not aware that he is planning to leave the firm. But he is free to decide what he wants to do.” This official did not want to be quoted by name.
There is speculation that some members of its fixed income team may also be on their way out.

In the recent past, the performance of fund managers has come under intense scrutiny in the wake of the market meltdown. Recently, some top officials of the Indian arm of a European mutual fund were asked to leave after its international audit team assessed that its fixed income was of inferior quality.

A person familiar with the development said Mr Sabharwal has drawn a lot of flak from JM’s management because many of its equity funds have fallen further than others in the same categories. This in start contrast to the situation in the bull run, when schemes that were managed by him were among the top performers in the industry. For instance, one of its popular funds, JM Basic Fund, which was at one point delivering more than 100% annualised returns, has been struggling of late.

In the last quarter, while the Sensex has fallen a little under 3%, the fund contracted 19%. Industry officials familiar with his investment style said his aggressive exposure to mid-cap stocks may have increased risks. Mr Sabharwal shot to fame in his assignment in SBI Mutual Fund, where he turned around the prospects of its equity funds through his aggressive investment strategy.

He left the firm to join Lotus AMC — now Religare Aegon AMC — where he was asked to leave abruptly after the CBI named him, among others, in a case related to the purchase of Padmini Technologies shares by the mutual fund during the stock market scam in 2001. Mr Sabharwal joined JM soon after that.

Talk of Mr Sabharwal leaving the firm comes at a time when the parent company, JM Financial, has been under the spotlight of late, with the government ordering a probe into Maytas Properties where a JM-promoted private equity fund invested Rs 600 crore.

When asked about his role in this investment, Mr Sabharwal said he had not role to play in JM’s private equity arm’s investments. One of the most affected stocks in the financial sector in the bearish phase, shares of JM Financial closed higher at Rs 21 on Wednesday.

Source: http://economictimes.indiatimes.com/News/News-By-Company/Corporate-Announcement/Top-fund-managers-may-quit-JM-Financial/articleshow/4152311.cms

Interim Budget 2009-2010

Interim Budget 2009-10

Publish at Scribd or explore others: Business & Legal Government money management

Hi

Dear Viewers,

I am not available till 18th Feb. I will keep posting 18th onwards.

Sorry for inconvenience cause to you.

Keep visiting this blog to know world of Indian Mutual Fund.

Happy Investing!!!

Mutual Fund industry assets up by 9.5%

The Indian Mutual Fund industry is on front foot once again. The industry’s assets under management (AUM) have risen by about 9.5% in Jan ’09 vis-à-vis Dec ’08. This is the second consecutive monthly rise in the AUM after a series of downfalls witnessed in the last quarter of 2008. Earlier the assets had risen by around 5% in Dec ’08.
With an asset base of Rs 4,60,949 crore, the industry may still have a long way to go to regain its highest absolute peak ever of Rs 6 lakh crore. However, in percentage terms, this rise is pretty significant as growth in January ’08 is second highest after Oct ’07. In last 15 months, growth in AUM has been over 10% on only two occasions.
LIC Mutual Fund is once again the biggest AUM gainer in percentage terms. Its assets are up by over 30% since last month to Rs 18,731 crore. This AMC had earlier reported a rise of over 23% in AUM for the month ended Dec ’08.
Other asset management companies (AMC) to have recorded significant rise in assets include IDFC, DWS Investments, Birla Sun Life, Tata, Principal, ICICI Prudential and Kotak. Each of these AMCs has recorded an increase of over 10% in their AUM.

While Reliance continues to be the largest player of the industry with an asset base of Rs 76,168 crore, followed by HDFC at Rs 51,420 crore, there has been a re-shuffling for the third position. ICICI Prudential has once again overtaken UTI to be the third largest fund house of the country. It has reported an increase of about 13.5% in its AUM which currently stands at Rs 47,515 crore against UTI’s 46,161 crore.

Source:http://economictimes.indiatimes.com/Personal_Finance/Mutual_Funds/MF_News/Mutual_Fund_industry_assets_up_by_95/articleshow/4070266.cms

Mutual Fund industry assets up by 9.5%

The Indian Mutual Fund industry is on front foot once again. The industry’s assets under management (AUM) have risen by about 9.5% in Jan ’09 vis-à-vis Dec ’08. This is the second consecutive monthly rise in the AUM after a series of downfalls witnessed in the last quarter of 2008. Earlier the assets had risen by around 5% in Dec ’08.
With an asset base of Rs 4,60,949 crore, the industry may still have a long way to go to regain its highest absolute peak ever of Rs 6 lakh crore. However, in percentage terms, this rise is pretty significant as growth in January ’08 is second highest after Oct ’07. In last 15 months, growth in AUM has been over 10% on only two occasions.
LIC Mutual Fund is once again the biggest AUM gainer in percentage terms. Its assets are up by over 30% since last month to Rs 18,731 crore. This AMC had earlier reported a rise of over 23% in AUM for the month ended Dec ’08.
Other asset management companies (AMC) to have recorded significant rise in assets include IDFC, DWS Investments, Birla Sun Life, Tata, Principal, ICICI Prudential and Kotak. Each of these AMCs has recorded an increase of over 10% in their AUM.

Open-ended mutual funds offer better returns

The pressure of redemptions, i.e. investors exiting from the fund, has given nightmares to many a seasoned fund manager. Open-ended mutual funds, which by definition allow investors to exit at any point, are run by fund managers who keep higher levels of cash aside for redemptions.
But being prepared for the worst scenario could have ‘helped’ openended mutual funds which have outperformed their closed-ended peers in the last 12 months, an analysis shows.
While top close-ended equity diversified funds have grossed (-) 44% in the one year, their top open-ended peers have given (-) 33% in the same time. As an investor, this means 10% of your money was saved if you chose an open-ended scheme. Both types of funds being ‘diversified’ meant they chose wide variety of stocks to hedge their risks but still a wide gap persists.
“One reason could be the optimal design for open funds,’’ Prateek Agrawal, head of equity at Bharti AXA Investment Managers, said. “Open-ended funds have to be prepared for both inflows and outflows.’’
Mutual fund industry analysts point out that fund managers in open-ended schemes keep 15-20% of assets in cash and cash related instruments to meet redemptions. Top open-ended funds such as Birla Sun Life Dividend Yield Plus, UTI Dividend Yield, IDFC Imperial Equity, DSP BlackRock Top 100 Equity and UTI Contra could have scored on this point.
Putting beside more cash left less room for open funds to remain less invested in themes such as mid-caps and smallcaps, which meant that they (open funds) were stuck with less illiquid stocks.
“A good number of fund houses zeroed in on the close-end structure to invest in small and mid-cap themes or infrastructure/construction stocks. These stocks were known to hold long term potential but were also among the most illiquid stocks,’’ said a fund manager of a closed-ended scheme.
Top closed-ended funds such as Tata Equity Management, UTI India Lifestyle, Fortis Sustainable Development, Sundaram BNP Paribas Equity Multiplier and LIC MF Top 100 were perhaps exposed to some illiquid stocks. Once trading volume thins, illiquid stocks are the ones more difficult to dispose off.
Dhirendra Kumar, CEO of fund tracking company Value Research, feels fund management for close-ended funds has been less intensive in the past one year.
“Most close-ended funds used to charge initial launch expenses of a new fund offer till 2007. This was stopped from January 1, 2008. Would fund management companies be interested at a similar level then? Launches of new close-ended funds have been minimal since then and existing funds were less-intensely managed,’’ Kumar said.

Source: http://economictimes.indiatimes.com/Personal_Finance/Mutual_Funds/Open-ended_mutual_funds_offer_better_returns_/articleshow/4070274.cms

Once again Reliance MF adjudged best fund house

Reliance Mutual Fund, part of the Reliance Anil Dhirubhai Ambani Group, has been adjudged the best fund house in India and Vikrant Gugnani the best CEO by Asia Asset Management, a journal of investments and pensions based in Hong Kong.
Asia Asset Management magazine is a monthly publication focusing on the institutional fund markets in the Asia Pacific region. The award is for the 12-month period ended December 2008.
Commenting on the awards, Leehock Tan, publisher of Asia Asset Management, said, “We have seen that Reliance Capital Asset Management Ltd continues to expand both its domestic and international franchise, re-affirming its dominance as the leading mutual fund house in India. Amidst the global economic crisis, its recent growth has been impressive. Thus, their commitment to the industry deserves to be recognized.”
On this recognition, the newly-appointed CEO of Reliance Mutual Fund, Sundeep Sikka, said, “This recognition is very special as it comes from an international and a very credible institution endorsing us as the Best Fund House in India. We convey our gratitude to our investors and partners who have been the driving force towards our success. Such recognition makes us more committed towards serving our investors with better products and services.”
Gugnani was the CEO of Reliance Mutual Fund from October 2005 to December 2008, and was instrumental in taking the company to leadership position and making it the most trusted brand amongst asset management companies, the company said in a press release.

Source: http://economictimes.indiatimes.com/Personal_Finance/Mutual_Funds/Reliance_MF_adjudged_best_fund_house/articleshow/4041672.cms