ICICI Pru MF to launch Gold ETF; files offer document with SEBI

ICICI Prudential Mutual Fund has filed an offer document with securities and exchange board of India (SEBI) to launch ICICI Prudential Gold Exchange Traded Fund (ETF), an open-ended exchange traded fund. The new fund offer (NFO) price for the scheme is Rs 100 each plus premium equivalent to the difference between the allotment price and the face value during the NFO.

Investment objective:
ICICI Prudential Gold Exchange Traded Fund seeks to provide investment returns that, before expenses, closely track the performance of domestic prices of gold derived from the LBMA AM fixing prices. However, the performance of the scheme may differ from that of the underlying gold due to tracking error.

Asset allocation:
The scheme would invest 90-100% of asset in gold bullion and instruments with gold as underlying asset. 0-10% in debt and money market instruments (including cash& cash equivalent).

Minimum application amount:
The minimum application for issue of units shall be made for a minimum of Rs 5,000 plus in multiples of Re 1 in cash (by way of demand draft and cheque) during the NFO. After the NFO, units will be created in a minimum size of 1000 gold units through Authorised Participants and Large Investors.

Target amount:
During the NFO period of the plans under the scheme, each Plan seeks to raise a minimum subscription of Rs 1 Lakh.

Benchmark index:
ICICI Prudential Gold Exchange Traded Fund will be benchmarked against the domestic price of gold as derived from the LBMA AM fixing prices.

Fund manager:
The scheme will be managed by Chaitanya Pande.

Source:http://www.myiris.com/newsCentre/storyShow.php?fileR=20090919113111707&dir=2009/09/19&secID=livenews

Govt may halve time bar for insurance IPOs

Listing lock-in may be eased to five years, Reliance Life may be the first beneficiary.

The government is likely to allow insurance companies to list after five years of operations against the 10 years prescribed at present.

The move follows a proposal from Anil Dhirubhai Ambani Group’s Reliance Life Insurance, which is planning an initial public offer by March to raise resources and fund its expansion plan. Reliance Life will complete four years of operation and would have to wait for another six to meet the present stipulation. Reliance Capital had acquired AMP Sanmar in 2005, which started operations in 2002. So, the two companies put together have completed seven years.

Citing the guidelines, Insurance Regulatory and Development Authority (Irda) had turned down a proposal from Reliance Life to list this year and referred the case to the finance ministry. The finance ministry, in turn, had sought the law ministry’s opinion on the rules.

A ministry official said the government wanted to understand if the10-year period was the minimum stipulation or if it meant the company had to list by the time it completed 10 years of operations.

“There is one insurance company that has had discussion with the Irda on whether we will permit them to disinvest now. We said it is only the government that can reduce the tenure. Then they approached the government. The government is thinking of reducing it to five years. Therefore, they have written to us, saying we propose to make rules like this and sought our suggestions We have no particular issue,” Irda Chairman J Hari Narayan told Business Standard in an interview.

None of the private players have completed 10 years of operation, with the first licence issued to HDFC Standard Life in October 2000. If the rules are amended, of the 22 private players, at least 10 insurance companies can raise funds from the public market. Apart from Reliance and HDFC Standard Life, the list includes ICICI Prudential Life Insurance, SBI Life, Max New York Life, Kotak Mahindra Old Mutual Fund, Birla Sun Life, Bajaj Allianz Life Insurance, Metlife, ING Vysya Life Insurance Company and Tata AIG Life Insurance.

The companies would, however, be able to tap the markets only after the insurance regulator finalised its IPO guidelines, which are expected later this month. Hari Narayan said the promoters would have to reduce their stake proportionately. So, in the case of a 10 per cent dilution, the Indian partner, which has, say, a 74 per cent stake, would have to pare its holdings by 7.4 per cent, while the foreign partner’s stake would fall by 2.6 per cent.

The stipulation could, however, create complications for the foreign partner since it could lose the power to block a board resolution, which requires a minimum 26 per cent holding. The regulator is expected to address these issues in the guidelines.

Apart from the guidelines, some life insurance companies are also waiting to turn profitable to tap the markets. Barring a few players such as SBI Life, Metlife and Sahara Life, most insurance players make losses.

“Under general rules only profit making companies are allowed to go public but the Securities and Exchange Board of India has, in certain situations, allowed loss-making companies to go public but only through the book-building procedure. But it will be subject to Sebi’s guidelines,” Hari Narayan said.

Source: http://www.business-standard.com/india/news/govt-may-halve-time-bar-for-insurance-ipos/370573/

IDFC Asset Allocation Fund of Fund files offer document with SEBI

IDFC Mutual Fund has filed an offer document with securities and exchange board of India (SEBI) to launch IDFC Asset Allocation Fund of Fund, an open-ended fund of fund scheme.

The new fund offer (NFO) price for the scheme is Rs.10 per unit.

Investment objective:
The primary investment objective of the scheme is to generate capital appreciation through investment in different mutual fund schemes based on a defined asset allocation model covering both local and offshore assets.

Plans:
The scheme will offer 3 different plans -conservative asset allocation plan (Conservative AA Plan), moderate asset allocation plan (Moderate AA Plan) and aggressive asset allocation plan (Aggressive AA plan) that will offer 3 different risk profiles for investors. Conservative AA Plan will target the lowest risk profile followed by Moderate AA Plan. Aggressive AA will be the highest risk profile asset allocation.
Each plan offers both growth option and dividend option (payout and reinvestment).

Asset allocation:
The Conservative AA Plan will invest 10-15% in equity funds, 45-50% in debt funds, 45-50% in money market funds, 0% in alternate and 0-15% in money market securities.Moderate AA Plan will invest 25-30% in equity funds, 60-70% in debt funds, 0-5% in money market funds, 5-10% in alternate and 0-15% in money market securities.Aggressive AA Plan will invest 45-50% in equity funds, 35-45% in debt funds, 0-5% in money market funds, 10-15% in alternate and 0-15% in money market securities.Alternate - It will consist of allocations to offshore commodity equity funds as well as domestic Gold ETFs.

Minimum application amount: The minimum application amount for all plans (non SIP purchases) is Rs 5,000 and in multiple of Re 1 for purchases and in multiples of Re 0.01 for switches. SIP purchase - Rs 1,000 (subject to minimum of 6 installments of Rs 1,000 each).
Target amount: The fund seeks to collect a minimum subscription amount (plan level) of Rs 10 million under the scheme during the NFO period.

Load structure: The scheme will charge no entry load. But an exit load of 0.25% of the NAV shall be applicable if investors who redeem / switch out such investments within 3 months from the date of subscription applying First in First Out basis, (including investments through SIP/STP).

Benchmark index: The schemes performance would be benchmarked against Crisil MIP Blended Index.

Fund manager: The scheme will be managed by Ashwin Patni.

Source:http://www.myiris.com/newsCentre/storyShow.php?fileR=20090917135234707&dir=2009/09/17&secID=livenews

Mirae Asset launches Mirae Asset China Advantage Fund

Mirae Asset Global Investments has announced the launch of India’s first Pure China Fund, Mirae Asset China Advantage Fund (MACAF), an open-ended fund of funds scheme that will invest predominantly in Mirae Asset China Sector Leader Equity Fund, a SICAV fund domiciled in Luxembourg. The fund will be open for subscription from September 14, 2009 to October 9, 2009.

The scheme seeks to generate long-term capital appreciation by investing predominantly in units of Mirae Asset China Sector Leader Equity Fund and/or units of overseas funds and units of exchange traded schemes that focus on investing 65-100% in equities and equity related securities of companies domiciled in or having their area of primary activity in China and Hong Kong. The scheme may also invest 0-35% of its corpus in debt and money market securities and/or units of debt/liquid schemes of domestic mutual funds, in order to meet liquidity requirements from time to time.

According to Mr. Arindam Ghosh, CEO, Mirae Asset Global Investments (India) Pvt. Ltd., “China is poised to lead the world out of the global slowdown backed by its domestic consumption and stimulus push from the government. We are pleased to launch Mirae Asset China Advantage Fund for the Indian investors, thereby meeting their asset allocation needs. The international fund of funds will provide investors access to one of the world’s growing economies and will enable them to prudently diversify their portfolio”.

According to Mr. Byung Ha Kim (Fund Manager for Mirae Asset China Sector Leader Equity Fund): “The Chinese economy is leading the world on the recovery path. China should maintain its high growth rates in the coming years and even in this scenario, the overall macro risk associated with the country is relatively very low. With Mirae Asset China Advantage Fund, we aim to offer an opportunity to Indian investors to benefit from the growth potential of local Chinese companies”.

The new fund offers a regular plan with dividend (payout & reinvestment) and growth options, with the minimum application amount for the regular option being Rs.5000/- and in multiples of Re.1/- thereafter. The Scheme does not guarantee or assure any returns. The fund would be benchmarked against MSCI China Index (INR terms).

Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/Mirae-Asset-launches-Mirae-Asset-China-Advantage-Fund/articleshow/5021789.cms

IDFC MF lanuches FMP; files offer document with SEBI

IDFC Mutual Fund has filed an offer document with securities and exchange board of India (SEBI) to launch IDFC Fixed Maturity Plan (FMP) Quarterly Series 55 - 57, Half Yearly Series 9 - 11 and Nineteen months Series 2, a close-ended income scheme.

The new fund offer (NFO) price for the scheme is Rs10 per unit.

Investment objective:The primary investment objective of the scheme is to seek to generate income by investing in a portfolio of debt and money market instruments maturing before the maturity of the scheme. There is no assurance or guarantee that the objectives of the scheme will be realized.

Plans:
IDFC Fixed Maturity Plan - Quarterly Series 55 - 57 (Plan A)
IDFC Fixed Maturity Plan - Half Yearly Series 9 - 11 (Plan A)
IDFC Fixed Maturity Plan - Nineteen months Series 2 (Plan A & B)
The plans will have both growth and dividend option.

Structure: Close Ended Income scheme with 2 plans (Plan A & B) under IDFC Fixed Maturity Plan - Nineteen months Series 2 and one plan (Plan A) under IDFC Fixed Maturity Plan - Quarterly Series 55 - 57, IDFC Fixed Maturity Plan - HalfYearly Series 9 - 11.

The schemes have following duration:
1) IDFC Fixed Maturity Plan - Quarterly Series with duration of Three Months
2) IDFC Fixed Maturity Plan - Half yearly Series with duration of Six Months
3) IDFC Fixed Maturity Plan -Nineteen Months Series with duration of Nineteen Months.

Minimum application amount:The minimum application amount for IDFC FMP - QS - 55 -57 & IDFC FMP - HS - 9-11 Plan A is Rs 25000 and multiples of Re 1and IDFC FMP - 19 mts - 2 Plan A is Rs 5000 and multiples of Re 1 and Plan B - Rs 25 lakhs and multiples of Re 1.
Asset allocation:The scheme will invest 0-100% in debt and money market. Investment in securitized debt will be up to 50% of net assets of the plan(s). Investments in derivatives, foreign securities and stock lending will be nil.

Target amount:The fund seeks to collect a minimum subscription amount of Rs 10 million under the scheme during the NFO period.

Load structure: The scheme will charge no entry and exit load.

Benchmark index:The schemes performance would be benchmarked against Crisil Composite Bond Fund Index.

Fund manager:The scheme will be managed by Anupam Joshi.

Source: http://www.myiris.com/newsCentre/storyShow.php?fileR=20090917143352707&dir=2009/09/17&secID=livenews

Regulator wants systems audit of mutual funds

Within two days of making a series of proposals to prevent Satyam-type accounting scams, the Securities and Exchange Board of India (Sebi) today said mutual funds would need to have a systems audit conducted by an independent certified information systems auditor (CISA) or its equivalent authority.

The market regulator has advised fund houses that the audit should be conducted once in two years. For financial years 2008-2009 and 2009-2010, Sebi said the systems audit should be completed by September 30, 2010.

The domestic mutual fund industry manages assets of over 7.5 lakh crore.

“The audit should be comprehensive, encompassing systems and processes inter alia related to integration of the front-office system with the back-office system, fund accounting system for calculation of net asset values, and financial accounting and reporting systems,” said Sebi.

It added the audit would also look at “unit-holder administration and servicing systems for customer service, fund flow processes, system processes for meeting regulatory requirements, prudential investment limits and access rights to systems interface.”

Nimesh Shah, chief executive officer of ICICI Prudential Mutual Fund, said, “We welcome this step and we will follow the direction as we have been given a year’s time. It is good for the industry and since the industry is in a serious business of managing people’s wealth, it is an important requirement.”

Fund CEOs that Business Standard spoke to said since new regulatory norms had come up and more players were preparing to enter the market, the systems of fund houses should be in compliance with the new regulatory norms.

Such a move would bring robustness to the industry, they said.

Sebi also asked the fund houses to place both audit and compliance reports before the trustees. These, along with the comments of the trustees, should be communicated to Sebi.

Source: http://www.business-standard.com/india/news/regulator-wants-systems-auditmutual-funds/370293/

IFAST launches Fundsupermart.com in India

The company also launched an equity funds index—FSM All-Equity Fund Index, that would act as an indicator for investors and fund managers.

Financial Services firm, iFAST Financial India on Wednesday launched Fundsupermart.com in the domestic market, an online transactional website for retail mutual fund investors.
The platform will allow customers free account opening and transactions at zero cost amongst other facilities, iFAST Financial India’s managing director, Rajesh Krishnamoorthy told reporters here.
This would also provide consolidated reports to help the customers manage their holding with ease, he said.
The company also launched an equity funds index—FSM All-Equity Fund Index (Fefi), that would act as an indicator for investors and fund managers.
The composition and structure of Fefi is based on the performance of select open-ended equity funds and currently comprises 79 equity mutual funds, Krishnanmoorthy said.

Source: http://www.livemint.com/2009/09/16165739/IFAST-launches-Fundsupermartc.html

Mutual funds ride on public sector IPOs

SBI Funds, Sundaram BNP Paribas Asset Management look to launch PSU-dedicated funds; more in pipeline

Mutual funds are trying to take advantage of the government’s disinvestment cycle beginning with the initial public offerings in NHPC Ltd and Oil India Ltd by launching dedicated funds to invest in public sector units (PSUs).

At least two fund houses have filed their offer documents with the Securities and Exchange Board of India (Sebi), the capital market regulator, and more are in the pipeline. Even fund houses that have no immediate plans to launch dedicated PSU products say they will play the theme through investment plans.

SBI Funds Management Pvt. Ltd has filed an offer document with Sebi for a fund that will invest in public sector companies. Sundaram BNP Paribas Asset Management Co. Ltd has filed a document for Sundaram BPN Paribas Select Thematic-PSU Opportunities Fund.

Both these schemes will invest at least 65% of their portfolio in equity shares of listed PSUs. Religare Mutual fund is also planning a PSU fund, said an official from the fund house, who didn’t want to be named.

India has 36 asset management companies (AMCs), with total assets under management of Rs7.49 trillion at the end of August.

Fund managers say more schemes will be launched to play the PSU theme. The fund houses will try to garner returns by investing in stocks of state-owned companies that are either about to get listed on the exchanges or have been recently listed.

Investments during listing enhance the prospects of profit booking in the long run. After NHPC and Oil India, Bharat Sanchar Nigam Ltd is one of the next big public offerings.

“We are excited about the ongoing disinvestments process by the PSUs. We would not launch any PSU-dedicated equity fund at the moment, but we will try to take advantage by changing our asset allocation strategy through some of our existing equity diversified funds,” said Sundeep Sikka, chief executive officer of Reliance Capital Asset Management Ltd. The company manages assets worth Rs1.17 trillion.

Equity-oriented PSU funds have been launched only twice in the past, and both were floated by the oldest mutual fund house in the country, UTI Asset Management Co. Pvt. Ltd. The firm in 1993 launched UTI Master Growth Fund, which invested at least 50% of its assets in PSU stocks. The fund, with assets worth Rs243.25 crore, was merged with UTI Top 100 Fund last year.

The company launched another PSU-dedicated scheme called UTI PSU Fund in 2004, with assets of Rs18.09 crore, which was merged with UTI Index Select Fund in April 2007.

Traditionally, mutual funds have been the biggest buyers of PSU stocks during disinvestment. Many mutual fund experts believe PSU stocks can be the best bet for investors in the long run. This is because the government’s capital-raising strategy has changed over time. Until about two years ago, the government was considered conservative and hence, a majority of PSU shares used to be held by it.

As the markets evolved, the government is now more liberal towards disinvestment of its stakes in PSUs to raise capital. This change in tack would provide more clarity about the government’s moves, unlock the value of PSU companies and help fan positive sentiment among investors towards PSU shares. Fund managers are betting on this sentiment by launching new equity-related PSU funds.

“PSU stocks are generally available at a discount as compared with other companies. So, there is clearly an opportunity for mutual fund investments,” said Dhirendra Kumar, CEO, Value Research India Pvt. Ltd, a New-Delhi based mutual fund tracking firm.

“The businesses of PSUs are very focused and in the long run, we are very optimistic about such companies. Though the performance of PSU companies is very cyclical, in a span of three-five years, PSU stocks should outperform the markets,” he added.

According to a recent report by Prime Database, a New-Delhi-based primary market investment tracking firm, the scope for PSU IPOs is huge.

“The divestment process can begin with a bang and continue to create new milestones. With all these offerings, the shape and size of the Indian capital market will change for ever, and for good,” said Prithvi Haldea, chairman and managing director of Prime Database.

Still, there are concerns. There are 80 listed PSU firms on the Bombay Stock Exchange. In terms of year-to-date gains, the benchmark Sensex has outperformed PSU stocks. While the Sensex has risen 72.87% during the calendar year, the PSU index has managed a gain of 66.45%.

Some fund managers are sceptical about the launch of dedicated PSU equity funds, saying a limited universe of asset allocation among PSU firms could crimp returns.

“We will not launch any thematic PSU fund at the moment, since the opportunity in the space is limited. Even with more PSU companies getting listed, we will rather prefer to watch how the market evolves. But we may invest in PSU companies through some of our existing schemes,” said Jaideep Bhattacharya, chief marketing officer, UTI Asset Management, which manages Rs73,926 crore of assets.

Another risk, according to N. Sethuram, chief investment officer of Shinsei Asset Management (India) Pvt. Ltd, is that PSUs are not an all-weather investment. “Themes need to be useful across time bands. We need to see how far they are useful,” he said. “PSUs tend to perform in line with the government. The performance is subject to the government of the day and policy risks.”

Source: http://www.livemint.com/2009/09/16214007/Mutual-funds-ride-on-public-se.html