Money flows back into MFs

If the number of draft offer documents filed with Securities and Exchange Board of India (SEBI) is any measure, mutual funds (MFs) seem particularly cheerful despite stricter new rule on entry load.
Market players say AMCs are on a high, thanks to renewed retail investor interest in equity, flow of new money and maturing of fixed deposits where wary investors had parked their funds during the recent trough.
MFs’ offer documents filed with SEBI rose 32-fold between August and September 18 from a single document filed in the seven months to July, 2009. September alone saw 22 offer documents being filed.
“This has to be because of the up move witnessed in markets and improvement in the economy. Fund houses now foresee higher retail investor interest,” said Apurva Shah, VP and Head of Research — Institutional Equity, Prabhudas Liladhar.
Though it appears that the downturn is behind, figures indicate that the market rally was initially not spurred by retail participation. There was no new money flowing into the market.
“The old money had depreciated during the downturn and investors were shying away from investing. Now, with people recovering losses made during the slowdown, they are eager to participate in the rally and invest in equity and Mutual Funds,” said Gopal Agarwal, Equity Head — Mutual Fund, Mirae Asset.
“Also, high-cost fixed deposits, in which investors had parked their funds during tough market conditions, are now going to mature and would flow to mutual fund and equity market,” said Agarwal.
Shah feels that the new SEBI norm on entry load would stem the flow of old money, as distributors would not see any incentive in channelling it into mutual funds.
Indian economy is perceived as resilient, and its cyclical nature of downturn attracts foreign institutional investments, said Agarwal, adding: “Both internal and external factors are in favour of Indian economy and markets. That is why, despite stricter norms by SEBI, MFs are buoyant.”

Source: http://www.hindustantimes.com/Money-flows-back-into-MFs/H1-Article1-456124.aspx

MFs invest Rs 40,246 cr in blue-chip companies

Money managers handling mutual funds are playing it safe and betting on the top 10 stocks in the bourses, ensuring that their funds perform in line with the overall market. In fact, these blue-chip companies are attracting 28% of mutual fund investment in the equity market.
According to a Sunday ET analysis, out of the Rs 143,860 cr being invested in stocks by mutual funds, as much as Rs 40,246 cr has been invested in just 10 scrips — Reliance Industries, Oil & Natural Gas Corporation (ONGC), Bharti Airtel, State Bank of India (SBI), ICICI Bank, Infosys Technologies , Larsen & Toubro (L&T ), Bharat Heavy Electricals (BHEL), Tata Consultancy Services (TCS) and HDFC Bank.
Significantly, the first five have an allocation of around 18% of the total equity investment of the mutual fund industry. Also, the 10 frontline stocks have high weightage in the Sensex index. Their cumulative weightage is around 59% in the Sensex in terms of market capitalisation as on September 16.
The Sunday ET analysis was done on the basis of the data provided by Value Research India, an independent investment information provider. The figures are as on August 31.

According to Kenneth Andrade, head investments at IDFC Mutual Fund, there is a correlation between the weightage of these companies in the overall market capitalization of listed entities and the investments made by the mutual fund industry.
So far as individual holdings are concerned , Reliance Industries and ONGC attracted around 4% of the total equity investment of the mutual fund industry each. Bharti Airtel, SBI, ICICI Bank and Infosys Technologies were allocated 3% of the total amount each.

Source: http://economictimes.indiatimes.com/MFs-invest-Rs-40246-cr-in-blue-chip-cos/articleshow/5034235.cms

Axis MF to unveil Short Term Fund; files offer document with SEBI

Axis Mutual Fund has filed an offer document with securities and exchange board of India (SEBI) to launch Axis Short Term Fund, an open-ended debt scheme.

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

Investment objective:The scheme will endeavor to generate stable returns with a low risk strategy while maintaining liquidity through a portfolio comprising of debt and money market instruments.

Plans: The scheme offers growth and monthly dividend option. Monthly dividend option will have payout and reinvestment sub options.

Asset allocation: The scheme would invest 30-100% of asset in money market instruments and debt instruments including government securities, corporate debt, securitized debt (includes securitized debt (excluding foreign securitized debt) up to 30% of the net assets of the scheme) and other debt instruments with maturity/average maturity/residual maturity/interest rate resets less than or equal to 375 days or have put options within a period not exceeding 375 days. 0-70% in debt instruments including government securities, corporate debt, and securitized debt (includes securitized debt (excluding foreign securitized debt) up to 30% of the net assets of the scheme) and other debt instruments with maturity/average maturity/residual maturity/interest rate resets greater than 375 days. The scheme shall not invest in foreign securitized debt. Investment in derivatives will be up to 100% of the net assets of the scheme. Investment in derivatives shall be for hedging, portfolio balancing and such other purposes as maybe permitted from time to time. The scheme can invest up to 50% of net assets in foreign securities.

Minimum application amount:The minimum application amount is Rs 5,000 and in multiple of Re 1 thereafter.

Target amount:The fund seeks to collect a minimum subscription amount of Rs 10 million.
Benchmark index:The schemes performance would be benchmarked against Crisil Short Term Bond Fund Index.

Fund mangers:Sriraj Bhattacharjee and Ninad Deshpande are the fund mangers of the scheme.

Source: http://www.myiris.com/newsCentre/storyShow.php?fileR=20090919114737707&dir=2009/09/19&secID=livenews

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