Mirae Opportunities Fund to pay Rs 1.50/unit

Mirae Asset India Opportunities fund on Monday declared a dividend of Rs 1.50 per unit (face value – Rs 10 per unit) under the dividend option – regular plan. The record date of the dividend is December 10, said the company in a press release.

The NAV of this dividend option of the fund was Rs 16.030 as on December 1. Pursuant to payment of dividend, the NAV of the scheme (dividend option) would fall to the extent of payout and statutory levy, if any.

This is the second dividend payout by Mirae Asset mutual fund in the last two years.

Mirae Asset India Opportunities fund is an open-ended equity oriented fund and has given 70 per cent returns compared with the benchmark index BSE 200's return of 54 per cent.

Source: http://www.thehindubusinessline.com/2010/12/07/stories/2010120753041100.htm

Invest in consistent mutual funds to beat market volatility

The current bull run is marred with ample volatility due to global liquidity, scams, inflation, interest rates, fears of war, increased FII pullouts and economic worries around the globe. Some aggressive investors turn market volatility in their favor by churning quick profits.

However, such wild price movements could lead to heavy losses in an investor's portfolio. Are mutual funds affected by market volatility? Since the underlying investments of mutual funds include picks from stock markets, the volatility of the markets transcends up to these funds. Irrespective of the strategies employed by fund managers, mutual funds cannot remain totally immune to market fluctuations.

The extent of volatility is determined by the extent of fund's exposure to equity.

Market volatility can be beaten by owning actively managed mutual funds or non-index mutual funds. The fund manager identifies stocks that are susceptible to negative market swings and adopts strategy to minimize the impact of a fall. A more volatile fund is associated with larger risk, especially when you require money over a short term.

This is when a fund's volatility becomes critical.

It is true that past performance cannot accurately predict future returns. However, this data provides an insight into the fund's volatility. The standard deviation of a mutual fund is a measure of variation of returns across a period of time.

A fund's beta is another common measure of volatility. Here, beta compares a fund's performance to a benchmark, typically an index. The beta coefficient refers to the return that a stock or portfolio of stocks is expected to achieve in relation to the returns provided by the stock market as a whole. The closer a mutual fund's beta is to one, the less volatile it is. If the beta value is greater than one, it is more volatile.

To beat volatility, invest in mutual funds that have exhibited consistent growth over the years.

Here are a few investment options for the risk averse:

Balanced fund

Young investors who seek decent returns for moderate risk can explore balanced funds. These invest partly in equity and partly in debt instruments. While equity investments lend growth prospects to the portfolio, debt investments provide the much needed stability and capital preservation. Most balanced funds have equity to debt investments in the ratio of 65:35.

Debt mutual fund

For those investors who are close to their retirement years, assured of liquidity, capital preservation and regular flow of income are prime concerns. They usually aren't concerned in making quick profits by taking considerable risks. Debt mutual funds are not only less risky but also provide higher posttax returns than the traditional debt products.

Invested in fixed income instruments, debt mutual funds pass on interest income earned to investors in the form of dividend. These dividends are subjected to Dividend Distribution Tax and the same is withheld by the fund house before disbursement.

Systematic investment plan (SIP)

Investment discipline or systematic investing is key to building a long term robust portfolio. Instead of investing a lump sum, the investor can choose to invest in a particular mutual fund scheme on a periodic basis. He not only benefits from the power of compounding but also from Rupee Cost Averaging. This is the ideal investment vehicle for long term investors. Some fund houses offer SIP investments as low as Rs. 250 per installment, making it very attractive.

Fund houses are now providing more investment frequency options for investors - daily, weekly, monthly and others. A daily SIP takes advantage of intra-month swings in prices of stocks, which comprise that scheme's portfolio.

Monthly income plan (MIP)

Yet another option for investors with low risk appetite is MIPs. Funds in this category invest a small portion of around 15 percent to 25 percent of the portfolio in equity and the rest is pumped into debt and money market instruments. Investors must know that unlike what the name suggests, monthly income is not assured but is dependent on market performance.

Investors can get higher returns owing to the fund's equity exposure, compared to fixed deposits and pure debt funds. Medium or risk averse investors can invest in new hybrid products that have exposure to both equity and debt markets.

These hybrid funds have equity exposures varying from 15 percent to 50 percent and an investor can choose such schemes which are in line with their risk appetite. These plans offer a balance of sensible risk with growth potential.

Source: http://economictimes.indiatimes.com/features/financial-times/Invest-in-consistent-mutual-funds-to-beat-market-volatility/articleshow/7042076.cms?curpg=2

PAN to be mandatory for mutual fund investments

All mutual fund investors, new as well as existing, will need to mandatorily furnish their PAN (Permanent Account Number) details from next year irrespective of the size of their investment.

The move is part of the revised Know-Your-Customer (KYC) compliance norms to be adopted by fund houses from next year in order to comply with money laundering prevention rules.

Currently, individual investors need to quote PAN only for investments of Rs 50,000 or more, although non-individual investors are required to quote their PAN for all amounts.

All the fund houses have been asked by industry body Amfi to comply with new KYC norms, which would include collecting details like PAN, address proof and photograph of all their new and existing investors, with effect from January 1, 2011.

The Amfi (Association of Mutual Funds in India) decision follows a direction from market regulator SEBI earlier this year to tighten the KYC norms to check fraudulent practices and money laundering activities.

Earlier in 2007, SEBI had made it mandatory to furnish PAN - which is allotted by the Income Tax Department - for all stock market transactions as part of efforts to check fraudulent practices.

The fresh move will lead to MF investors going through some additional paper work, but it is expected to also benefit them as the entire KYC documentation would be centralised across all the fund houses with the help of PAN details.

Subsequent to this, existing investors would not need to go through any paper work for fresh KYC compliance at the time of their new investments.

With Amfi asking all the fund houses to implement new and standardised KYC norms with effect from next month, the fund houses have started the process of collecting the required documents from their investors.

In a circular issued to all the fund houses and distributors, Amfi has said that the industry has signed up CDSL Ventures Ltd (CVL) to undertake the centralised record keeping of all KYC documents.

On completing the one-time process of common standard of KYC with CVL, the investors will be able to transact across multiple mutual funds without having to repeatedly submit their documents with each mutual fund, Amfi said.

The KYC norms were first implemented in the mutual fund industry in February 2008 for all investors putting in Rs 50,000 or more in mutual fund schemes.

Subsequently, the rules were revised with effect from October 1, 2010 and all the investors other than resident individuals were asked to furnish PAN irrespective of the amount. However, resident individuals were allowed to invest up to Rs 50,000 without quoting their PAN details.

There are 44 fund houses in the country, who collectively manage over Rs 7 lakh crore of assets in more than four crore investor accounts.

Source: http://www.thehindubusinessline.com/blnus/05051720.htm

More foreign investors prepared to invest long term in India

Regulatory changes will place the Indian mutual fund industry in a better shape, but it might take time for fund houses to adapt to those changes, Stewart Edgar, chief executive officer (Asia- Pacific) at BNP Paribas Investment Partners, said in an interview. Edited excerpts:

What is your outlook for the growth of mutual fund industry in India, after a spate of regulatory changes that has led to a shrinking of the asset base?

I think we will gradually see assets growing. Mutual fund business is cyclical. But in growing markets like India, you could look five years ahead and expect yourself to be in a better position. And I feel the last few years have been good by shaking out people who were not prepared to stay for the long term and also in terms of forcing people to think about their long-term strategy.

It is actually a good time to be in India because there is a lot of regulatory change and a lot of them, we welcome.

You can always debate the speed of those changes, but as and when asset management companies absorb those changes, the industry will be in a better shape than before. We are not into the new era yet, and it might take two or three years for us to reach where we need to be.

There is a view in India that we have far too many product offerings from asset management companies and there is enormous mis-selling because of that. What do you think?

I think it is a bit difficult to judge the right number of products because it depends on how you define a product. In case of a vast country like India, where needs of clients could be different, I don’t think products themselves should be limited in number; rather products should be designed to suit particular needs.

The key for me in all markets is that the distributor needs to take huge responsibility in making the client understand what a product does and what it does not do.

Some regulators in Asia-Pacific have been slow to recognize the difference between what a distributor does and what an asset manager does.

The market rally this year has mostly been led by foreign investors, with local investors in India being net sellers in most of the months. How do you view this divergence?

This is not something unique to India, we have seen this happen in other markets like Indonesia and China, where locals have bought when the market dipped and sold when it rose, with foreigners on the other side of the trade.

As far as the foreign interest is concerned, I think that is fairly strong and there are more foreign investors who are prepared to make long-term equity investments in India than before. And when local investors realize that the foreign investors are here to stay, we might see a convergence in the views of both local and foreign investors.

For instance, in the rally in Indonesia, for the first six months or so, foreign investors largely led while local mutual funds saw redemption.

However, now people realize that you can’t keep selling and you need long-term exposure to equity, and I think a similar story will play out for India as well.

Source: http://www.livemint.com/2010/12/03210327/More-foreign-investors-prepare.html?atype=tp

Shinsei MF to be renamed as Daiwa MF

Shinsei Investment, Rakesh Jhunjhunwala and Freedom Financial Services (P), the current shareholders of Shinsei Asset Management (India) (P) (the AMC), the investment manager of Shinsei Mutual Fund, have entered into an agreement with Daiwa Securities Group (DSGI) and Daiwa Asset Management Co. (DAM), the parent company of DAM.

Pursuant to the agreement, DAM, the asset management subsidiary of the Daiwa Securities Group, will acquire 91% of the equity share capital of the AMC and the balance 9% of the AMC will be acquired by DSGI. As a result thereof, there will be a change in the controlling interest of the AMC and DAM will become the sponsor of Shinsei Mutual Fund.

Pursuant to the proposed transaction the name the fund house will be changed from Shinsei Mutual Fund to Daiwa Mutual Fund. The name of the schemes will also be changed as Daiwa Liquid Fund, Daiwa Treasury Advantage Fund and Daiwa Industry Leaders Fund.

In case an investor does not wish to continue to hold units in view of the said changes, they will have the option to exit the said scheme at the prevailing NAV, without any exit load. The said exit option can be availed between 8 December 2010 to 7 January 2011.

Source: http://www.myiris.com/newsCentre/storyShow.php?fileR=20101203142952707&dir=2010%2F12%2F03&source=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Myiris+(myiris.com+-+India's+Leading+Financial+Portal)

Q&A: Sunil Singhania, Head-Equities, Reliance Mutual Fund

Don't get jittery about volatility

Sunil Singhania, head-equities, Reliance Mutual Fund, tells Neha Pandey that the markets will stabilise soon and continue to rise. Edited excerpts:

How long do you see the correction lasting? Where do you see the markets in the next six months to one year?
We continue to believe the economy and equity markets will maintain their long-term growth phase. Corrections of 10-15 per cent can happen in any market. Our advice to investors would be to have a long-term investment horizon, and not get shaken by near-term news-based market volatility. Short-term jitters can never impact the inevitable long-term growth in the markets. We feel the markets will stabilise soon and resume their measured uptick.

In the current market, which sectors are you betting on?
We continue to be bullish on a wide range of sectors. Among the domestic themes, we favour of banks, capital spending and infrastructure-related sectors, including cement. Among the growth-oriented sectors, our view continues to be bullish on pharmaceuticals. We are also positive on information technology and will use the metal pack as a trading play based on price movements.

If a retail investor has a lump sum, should he/she invest in the current market?
The best strategy for a retail investor is to invest in mutual funds via systematic investment plans. Wealth creation for those with regular incomes could be through regular, disciplined investing. For a big investor, who has under-invested in equities, the correction can be used to correct his position and park a lump sum.

Would you advise retail investors to opt for midcap and smallcap stocks? Are there any multi-baggers there?
A diverse economy and a strong entrepreneurial mindset make our markets the best place for bottoms-up stock-picking. Although midcap and smallcap stocks tend to be volatile in the near term, investors with a long-investment horizon can look at investing in good midcap-oriented equity funds. Mutual funds are the best, safe way to invest in equity for retail investors.

What is your outlook on precious metals? Should one accumulate gold, maybe via exchange-traded funds (ETFs)?
We continue to be positive on gold, as it lends good diversification in the overall portfolio of an investor. Gold ETFs make for a very liquid investment compared with physical gold.

Is investing in IPOs and FPOs advisable for retail investors? Any upcoming one that you are betting on?
Good quality IPOs and FPOs have proven to be good return generators. Thus, investors should definitely invest in public offerings, provided the quality of the company is good and the IPO price is attractive, and not overvalued.

Source: http://www.business-standard.com/india/news/qa-sunil-singhania-head-equities-reliance-mutual-fund/416985/

Foreign MFs outpace domestic players in building assets

Assets rise 13% in first half, as local funds show a fall in AAUMs.

At a time the assets of domestic mutual funds are falling, those of foreign fund houses with presence in India, directly or through joint ventures, are growing remarkably.

Industry experts and chief executive officers attribute this to better products and the increasing familiarity of foreign funds with investors.

Statistics from the Association of Mutual Funds in India (Amfi) say foreign players’ assets rose 13 per cent in the first half of the current financial year. Domestic fund houses either registered negative or poor growth.

For instance, in the private sector, Indian-owned fund houses saw a dip of 7.5 per cent in average assets under management (AAUMs) to Rs 2,17,899 crore as on September 30 as against Rs 2,35,585 crore at the beginning of the year. Foreign players in the private sector saw a jump of 14.5 per cent in AAUMs at Rs 57,577 crore. These include AIG Global Asset, Fortis Investment, Franklin Templeton and Mirae Assets, among others.

So, too, in joint ventures (JVs) predominantly owned by foreign players, whose assets have risen by close to 10 per cent. The assets of funds where an Indian partner is dominant have grown a mere 1.4 per cent.

“Foreign-owned fund houses are aggressively marketing their products and investors are getting familiar with them. Moreover, their products are equally good performers,” said Dhruva Chatterji, senior research analyst at Morningstar India, an independent investment research firm.

“If the products are structurally well-positioned and perform well, I see no problem why people should not invest with us,” said the chief executive officer (CEO) of a foreign-owned fund house. He said foreign players faced intense competition, as domestic counterparts and banks-sponsored asset management companies had the advantage of a strong distribution network.

Bank-sponsored fund houses SBI MF and Canara Robeco put together grew assets by 6.8 per cent.

In agreement with this, another CEO of a fund house in a JV with a foreign partner said, “In metros, the brand equity of foreign-owned houses has strengthened. The competition now is to penetrate Tier-I & II cities, which offer huge potential.”

In the first half, the average assets dipped 4.6 per cent to Rs 7,13,290 crore from Rs 7,47,525 crore. Of the 41 fund houses in the country, 14 are fully or majority owned by foreign players.

Source: http://www.business-standard.com/india/news/foreign-mfs-outpace-domestic-players-in-building-assets/416955/

Kotak Mutual Fund revises key features under its scheme

Kotak Mutual Fund has decided to revise key features under its scheme - Kotak 30. The scheme will be renamed as Kotak 50. The change will be effective from 01st January, 2011. The revised investment objective is to generate capital appreciation from a portfolio of predominantly equity and equity related securities. The portfolio will generally comprise of equity and equity related instruments of around 50 companies which may go upto 59 companies at any point of time. Investors, who do not agree to the revision, have an option to redeem or switch their units between 02nd December 2010 to 31st December 2010, without paying any exit load.

Source: http://www.mutualfundsindia.com/news_viwe.asp?news_headline=Kotak+Mutual+Fund+revises+key+features+under+its+scheme+@MF037