L&T Mutual Fund ties up with Central Bank of India

L&T Investment Management Ltd. - Investment managers for L&T Mutual Fund one of the prestigious mutual funds in the country has formalized its tie-up with Central Bank of India, a leading public sector bank, to qualitatively enhance its reach in the category of mutual fund investors across the country.

On the Occasion, Mr. Sanjay Sinha, Chief Executive Officer, L&T Invest Management Ltd. said, “With this tie up, L&T Mutual Funds schemes will be available at all 3600 retail branch locations of Central Bank of India. This partnership will substantially strengthen our distribution network.”

About L&T Mutual Fund
L&T Mutual Fund is one of the premier asset management companies in the country that serves the investment needs of investors through a suite of mutual fund schemes. With proficient investment management practices and an equally competent fund management team, L&T Mutual Fund helps its investors reach their financial goals

L&T Mutual Fund is backed by one of the most trusted and valued brands L&T Finance Ltd., incorporated as Non Banking Finance Company in November 1994. L&T Finance Ltd. has earned the trust of thousands of investors by adapting well to the changing market dynamics and emerging as a profitable venture despite the turbulences in the financial market over the past few years.

L&T Mutual Fund is present in 55 cities through its network of dedicated 58 branches and is continuously increasing its footprints across the country.

About Central Bank of India
Central Bank of India can be truly described as an All India Bank, with its large network in 27 out of 28 States and presence in 4 out of 7 Union Territories in India. Central Bank of India holds a very prominent place among the Public Sector Banks on account of its network of 3600 branches and 195 extension counters at various centers throughout the length and breadth of the country.

Source: http://www.business-standard.com/india/news/lt-mutual-fund-ties-upcentral-bankindia/419320/

Bharti may exit Bharti-AXA Mutual Fund

Bharti-AXA Mutual Fund is most likely to sell its stake to Bank of India and the deal is to be finalised in the next one month. Earlier, public sector banks like Central Bank and Indian Overseas Bank were reported in the race to buy the stake in the mutual fund house.

According to the market participants, Bharti Enterprises which holds 25% stake in the venture is likely to exit from the mutual fund business. Sandeep Dasgupta, CEO of Bharti AXA investment manager said, “We are looking for a banking partner, but I can't comment whether it will completed within the next month, as there are several processes to go through.” He didn't comment on the share price at which Bharti will exit the business. “You will know it once the deal is done,” he said.

For the last two years, Bharti-AXA MF was looking for a partner to expand its asset management business, but talks were put on hold following financial meltdown of 2009. A senior official close to the development said, “valuations are still being worked-out as Bank of India is planning to buy more than 25% stake in the fund house.”

Source: http://www.indianexpress.com/news/bharti-may-exit-bhartiaxa-mutual-fund/728646/

Sundaram MF declares dividend for Select Thematic Funds Rural India Fund

Sundaram Mutual Fund has approved Dec.24, 2010 as the record date for declaration of dividend under dividend option of Sundaram Select Thematic Funds Rural India Fund.

The face value of per unit is Rs 10.

The quantum of dividend will be 30% (Rs 3 per unit) as on the record date.

The primary investment objective of the scheme is to generate consistent long term returns by investing predominantly in equity / equity related instruments of companies that are focusing on rural India.

Source: http://www.myiris.com/newsCentre/storyShow.php?fileR=20101222155045707&dir=2010/12/22&secID=livenews

10 stock picks of fund managers

Mutual Funds in November uploaded stocks like Indian Hotels and stocks in Construction & Engineering space. Tilkanagar Industries - the Indian made foreign liquor maker and a strong south bound player was second in the list in terms of number of shares added, according to report released by Religare Securities.

Mining stocks were in the crosshairs of the Fund managers on the back of big bang listing of Coal India. As many as 5 AMCs added Coal India. Electric Utilities also got top billing from fund houses. Power Grid was bought by 6 AMCs.

Top 10 most bought stocks by MF in November

Coal India (24 mn shares)

Tilaknagar Industries (2.89 mn shares)

TVS Motor Co (2.66 mn shares)

Power Grid Corporation of India (2.31 mn shares)

Texmaco Rail & Engineering (1.67 mn shares)

Chambal Fertilisers & Chemicals (1.15 mn shares)

Indian Hotels Co (0.93 mn shares)

Himadri Chemicals & Industries (0.85 mn shares)

Gammon Infra (0.82 mn shares)

JaiPrakash Associates (0.74 mn shares)

Top 5 sector exposures

Banks (11%)

Petroleum, Gas and petrochemical products (9%)

Engineering and Capital Goods (7%)

Auto & Auto Ancillaries (6%)

Steel and Ferrous Metal (6%)

Kotak Mahindra Mutual Fund announces conversion of its scheme into open ended

Kotak Mutual Fund has announced the conversion of it scheme - Kotak Indo World Infrastructure Fund, a three year close ended equity scheme into an open ended equity scheme, with effect from 27th January, 2011. There will be no changes to any other fundamental features of the scheme on being converted into open ended scheme except that scheme is converted from close ended to open ended scheme. The scheme will charge an exit load of 1 per cent if exited within 1 year from the date of allotment of units and nil if exited after 1 year from the date of allotment of units. The unitholders of the scheme who are not in agreement with the conversion may redeem their units at applicable NAV or switch to other open ended schemes of Kotak Mutual Fund without payment of exit load between 25th December, 2010 and 25th January, 2011.

Source: http://www.mutualfundsindia.com/news_viwe.asp?news_headline=Kotak+Mahindra+Mutual+Fund+announces+conversion+of+its+scheme+into+open+ended@MF037

Sundaram Rural India Fund declares dividend

Sundaram Mutual Fund has declared a dividend of 30% (Rs 3 per unit on a face value of Rs 10) under the dividend option of Sundaram Rural India Fund . The record date for dividend has been fixed as December 24, 2010.

All investors registered under the dividend option of Sundaram Rural India Fund as on December 24, 2010 will receive the dividend. The NAV of the scheme as on December 20, 2010 was Rs 14.486 per unit.

Sundaram Rural India Fund is an open ended growth fund. The primary objective of the scheme is to generate consistent long term returns by investing predominantly in equity / equity related instruments of companies that are focusing on rural India.

Source: http://www.moneycontrol.com/news/mf-news/sundaram-rural-india-fund-declares-dividend-_506213.html

Equity fund managers hop jobs

When Peter Lynch left the job of managing US equity fund Fidelity Magellan fund in 1990, he had spent a solid 13 years managing the fund. During his tenure the fund consistently gave returns that beat the market to become a $13 billion fund in terms of assets. Popular wisdom has it that a long association of a fund manager to a mutual fund scheme does wonders to its performance. Even investors are known to be comfortable investing in funds where managers have been around for a longer period.

Interestingly, in this regard, Indian equity fund managers have been found to be fleet-footed compared to their US counterparts. Perhaps with few exceptions like Prashant Jain who has remained associated with HDFC fund for more than a decade, the average tenure of an equity fund manager is less than 2 years. On the other hand, in developed markets like the US and the UK, fund managers have been known to have long-term associations of 10-15 years. Among Indian equity funds, Reliance Growth, UTI Equity Tax Saving, Sundaram Select Focus, FT India Life Stage fund of fund—have had managers managing the fund for more than 8 years. HDFC Prudence is perhaps the fund with longest association— Prashant Jain has been its fund manager for 16 years. Sunil Singhania, head of equities at Reliance Mutual fund says, “Certainly the performance of the funds also depend largely on the tenure of the fund manager. Also, frequent change in the fund manager brings portfolio change and difference in investment strategy.”

While every fund house endeavours to mitigate the risk of the manager quitting, by standardising the risk management measures, stock picking is also believed to be an individualistic attribute. “There is a constant pressure to not only outperform but also remain on the top. It has led to many fund managers quitting the industry to join private equity and hedge funds.” says the CEO of a leading fund house on condition of anonymity.

It is also being increasingly seen that a single fund manager co-manages over 4-5 schemes, all thanks to spate of new NFOs.

TP Raman, MD of Sundaram MF says, “If a fund manager sticks to his style of investment then there is no cause of worry.”

He adds that, consistent good performance is possible only if one fund managers stay for a longer tenure.

Source: http://www.financialexpress.com/news/equity-fund-managers-hop-jobs/727249/0

Investors will benefit by investing in Religare Bond Fund: Saurabh Nanavati, Religare Mutual Fund

In an interview to ET Now, Saurabh Nanavati , Chief Executive Officer , Religare Mutual Fund , presents his outlook on bond markets and Religare Medium Term Bond Fund .

Why have you timed this fund offering at a time like this because everyone believes that interest rates are only halfway on their up?

Interest rate hikes are almost done. We are expecting another 25 basis point hike in the Jan to March quarter but post that, interest rates should stabilise. This fund was missing in our product suite and we did a lot of research at the ground level where retail investors were very comfortable investing in bank deposits between 1 year to 5 years and what we thought was if we could come out with the fund where the mandate explicitly states that we will be investing in papers up to 5 years maturity and provide liquidity to the customer also backed by the tax efficiency of mutual funds and active fund management which could generate higher returns. The fund was pretty opportune for us in terms of launching at this point of time as also completing our product suite on the debt side.

You say that you expect rates to go up just by quarter percentage point maybe in January. The majority of people we speak to believe that rates will go up by 50 to 75 basis points maybe by July-August next year. So why do you believe that interest rate hikes are pretty much at the end of their climb up?

Inflation which is the key concern of the central bank is now coming down and it could perhaps even touch their targeted levels at 5.5%. Having said that, even the RBI report mentioned that there was an upward bias. Because of the last 3 months, what we have seen is commodity prices have moved up significantly, food prices have moved up, the oil price hike last week will add close to 60 basis points. So to that extent, there is an upward bias on the inflation target but from a rate hike perspective, what we have seen over last 18 months maybe another 25 basis points or at best another 50 basis points post which RBI will have an adequate enough buffer as compared with the developed economies and then they can again get back to focussing on growth in the coming year. So interest rates will stabilise from April onwards and that stabilisation in terms of interest rates not changing could remain for a one-year period.

What about the quarter third earnings that we will see trickle in in January? How big an important cue do you think would they be for the market as such and to provide direction? What is the Sensex earnings growth forecast that you have at Religare?

For the year ending March 2010, the Sensex earning was close to around 840. March 2011 will end at close to 1040 and one year down the line, March 2012, our estimate is close to 1250. So we are projecting an 18% to 20% growth rate for Indian corporates for next year.

You are expecting that interest rates will stabilise by April, why should I as an investor be putting my money into your fund right now if you are saying that interest rates will stabilise by April and that is really when a bond fund like the one you are offering today will actually start seeing the benefits of declining interest rates? Why should I put money in now?

This fund is not a close ended fund. It is an open ended fund. So investors can invest at any point of time and what we are basically telling investors to continue investing month on month, quarter on quarter in this fund. The reason why you should invest at this point of time, the short term rates are extremely attractive at this point of time. We are looking at a flat yield curve in India which does not do justice to an economy actually which is growing at over 8% at this point of time. So this yield curve flattening is purely because of liquidity pressures. If you look back in May 15th just before the 3G auction period, banks were actually parking close to 1 lakh crores with the central bank and if we fast forward 6 months from there, at this point of time they are borrowing close to 1.5 lakh crores from banks. So the shift has been from positive 1 lakh to negative 1 lakh which is almost 2 lakh crores and because of that liquidity tightening phenomena, you are getting one year to 18 months bank CDs and corporate bond papers at anywhere from 9.5% to 10.5%. These levels are very very attractive. So if we can basically buy these bonds at this point of time and the one of the fund objective is also to hold these papers to maturity as far as possible, the investors will benefit by investing in these papers. 12 to 18-month segment is extremely attractive at this point of time.

If I could just point you to the fund offer document that you have put out. On the one hand you are talking about interest rates on 6 month to 2 year having risen by about 150 to 300 basis points. In the same document you talk about liquidity pressures in the system which are beginning to decline. Now everyone knows that interest rates at the shot having gone up is largely on account of the liquidity tightness. So these 2 comments in the offer document. Do not they run contrary to each other?

The liquidity crunch is a technical phenomena. It is primarily because one at this point of time the money in circulation with public has increased substantially to close to 80,000-90,000 crores in the last 9 months and because of negative real interest rate phenomena, they are not investing. The other aspect is government has close to 75,000 crores in the RBI account which traditionally would be at 5000 to 10000 crores only. So the government is not spending enough. We expect liquidity conditions to start easing from next quarter as compared with this quarter. The minute liquidity conditions start easing, the shorter term rates will come down. The other factor which you are pointing to is much longer in nature, much more fundamental based while the liquidity phenomena is a technical factor at this point of time.

Source: http://economictimes.indiatimes.com/opinion/interviews/investors-will-benefit-by-investing-in-religare-bond-fund-saurabh-nanavati-religare-mutual-fund/articleshow/7132957.cms?curpg=2