SBI Magnum Equity Fund declares dividend

SBI Mutual Fund has announced a dividend of 35% (Rs. 3.50 per unit on Face Value of Rs.10), under the dividend option of SBI Magnum Equity Fund. The record date for the dividend as been fixed as January 28, 2011.

All investors registered under the dividend option of SBI Magnum Equity Fund as on January 28, 2011 will receive this dividend. The NAV of the scheme under the dividend option as on January 21, 2011 was Rs 32.540.

SBI Magnum Equity Fund is an open-ended growth scheme. The investment objective of the scheme is to provide the investor long term capital appreciation by investing in high growth companies along with the liquidity of an open-ended scheme through investments primarily in equities and the balance in debt and money market Instruments.

Source: http://www.moneycontrol.com/news/mf-news/sbi-magnum-equity-fund-declares-dividend-_515728.html

Holding mutual funds in a demat account

Investors can now hold their mutual fund units in dematerialised form. Investor who own a demat account can use it to hold mutual fund units. It is however not mandatory to convert units into demat form. Investors can also use the electronic platforms of stock exchanges to transact in their mutual fund units through the brokers of the stock exchange.

For this, investors have to use a standard form specified by the depository (CDSL or NSDL) called the conversion request form ( CRF )) or destatementisation request form (DRF). This form is available with the depository participant (DP). The completed form, along with the statement of account (SoA) which shows the unit holdings of the investor, has to be submitted to the DP. The DP will verify and forward it to the registrar and transfer agent, who in turn will confirm the details of units held in the SoA. Units will be credited to the demat account after this confirmation.

1. ISIN: Each mutual fund is assigned an ISIN ( International Security Identification Number )). It can be obtained from NSDL or CSDL and has to be included in the CRF/DRF.

2. Details: The details of each scheme with respect to scheme name, ISIN and number of units held should be correctly mentioned in the CRF/DRF and should tally with the SoA being attached.

3. Holding Pattern
The holding pattern of the mutual fund folios and that of the demat account should be the same, and in the same order.

4. Free & Lock-in Units
Mutual fund units such as those of tax-saving schemes may be subject to lock-in. Different forms have to be used for free and locked-in units of the same scheme even if held under the same folio.

Points to note
Signatures: The CRF/DRF has to be signed by all the unit holders of the folio, irrespective of the mode of operation of the folio.

Transacting with the mutual fund: Once units are dematerialised, investors cannot transact in them directly with the mutual fund or investor service centres. Transactions are routed through the stock exchange platform or through the DP.

Re-materialsation of units: Investors can also make an application for re-materialisation of the dematerialised units and only then transact with the mutual fund.

Source: http://economictimes.indiatimes.com/articleshow/7346604.cms?prtpage=1

Back on 24th Jan 2011

Due to some reason we will not be able to post till 24th Jan 2011.

HDFC Mutual, Franklin accused of using client funds to promote brand

The latest round of promotions by HDFC Mutual Fund and Franklin Templeton Asset Management has prompted speculation among competitors and financial advisors that these companies may be using investors’ funds to boost their brand .

The multi-crore campaigns by these funds, though are not illegal, have raised ethical issues when the regulator has been working to cut costs for investors, including banning of entry loads. All mutual fund schemes’ advertisements go through the Securities & Exchange Board of India (Sebi) before going public.

Billboards and signs at traffic lights across Mumbai and Delhi that have sprung up display the companies prominently instead of individual funds which normally is the case. One such advertisement reads — ‘choose a healthy investment-HDFC Mutual Fund SIP’. The other — ‘Invest in Franklin Templeton Mutual Fund’. At the bottom of the boards, one of their funds’ name is written in a small font, the corpus from which possibly the cost of promotion is met.

“Fund houses could be paying for such advertisements from fund accounts,” said Dhirendra Kumar, chief executive at MF tracker Value Research.

“Older schemes have residual funds collected from entry and exit loads which need not be routed back to the NAV of respective funds. Fund houses use residual money to promote the fund under which the money is collected. In this case, I feel, residual money has gone into promoting fund houses,” he said.

“The campaign is not to promote the fund house,” said a HDFC Mutual Fund spokesperson. “It is carried out to promote investments in our four schemes through SIP. We aim to reach out to investors with a message of adapting a disciplined approach to equity investment through SIP as a preferred option.”

Franklin Templeton and Sebi did not respond to queries seeking their views. Asset management companies (AMCs) are struggling with slumping subscriptions to their equity schemes, after the regulator banned entry loads on funds which it believed was unjustified. Ever since, mutual funds have been working ways to promote schemes and draw investors.

This probably may be one of the ways to attract investor attention. While HDFC MF has named its ‘Capital Builder Fund’, ‘Growth Fund’ and ‘Core and Satellite Fund’ on the billboard, Franklin Templeton has highlighted its ‘India opportunities fund’, among others.

“From what it seems, both fund houses are on the right side of the law, but they have not carried out their ad campaigns in the right spirit,’’ said Ashutosh Wakhare , head trainer at Moneybee Institute, which trains investment advisors. “Fund houses should promote themselves using their own money.”

This is not the first time that mutual fund advertisements have come under an ethical debate. In 2008, after receiving complaints from some investor organisations, Sebi had asked AMCs to reduce the speed at which the ‘investment disclaimer’ is read out in television advertisements.

Source: http://economictimes.indiatimes.com/personal-finance/hdfc-mutual-franklin-accused-of-using-client-funds-to-promote-brand/articleshow/7233403.cms

Indian Bank to enter life insurance, restart MF biz

Public sector Indian Bank plans to venture into life insurance. It is looking at floating a consortium with domestic and foreign partners, for which it has already initiated talks. Besides, it would also appoint a consultant to advise it on re-entry into the mutual fund industry.

Speaking to Business Standard, Chairman and Managing Director T M Bhasin said Indian Bank was a bancassurance partner for HDFC Life Insurance and the agreement would mature in March. Last year, the bank earned a commission of Rs 26 crore through the tie-up and was targetting Rs 40 crore this year.

“We are now planning to float a new life insurance company on our own,” he said.

It may be noted that Bhasin was involved in Canara HSBC Oriental Bank of Commerce Life Insurance co, a joint venture (JV) between two of the largest public sector banks — Canara Bank and Oriental Bank of Commerce — and HSBC Insurance (Asia Pacific) Holdings. Bhasin represented Oriental Bank.

He said the bank had invited an expression of interest (EoI) from consultancy services to advise it on its proposed investment, which would either be a JV or based on equity participation.

The new company would take another six months to materialise and would be through a consortium, wherein Indian Bank and the domestic partner would have the majority stake and the foreign partner would hold 26 per cent, he said.

“We have got a few offers from both domestic and foreign firms. They are offering us equity at concessional rates. By charging on a monthly, per branch basis, we would use our branch networks effectively,” he said.

The 104-year Chennai-based Bank has more than 1,800 branches and over 19,000 staff. It has a customer base of around 200 crore. As on date, total business amounts to Rs 1.70 lakh crore.

“This foray will further strengthen our brand and the equity will also get appreciated in the long-term”.

The bank would also hire consultancy services for its proposed foray into mutual funds on a JV basis. It was planning to rope in a suitable partner for the same, said Bhasin.

Indian Bank is one of the pioneers in the mutual fund industry. It set up its mutual fund business in 1989, which became of the top performing mutual funds in the nineties. But in 2001, the bank transferred its schemes to Tata Mutual Fund.

Source: http://www.business-standard.com/india/news/indian-bank-to-enter-life-insurance-restart-mf-biz/420863/

Mutual funds’ AUM drops 5% in October-December quarter

The average assets under management of the mutual fund industry declined by a hefty 5% during the October-December quarter , with country’s largest fund house Reliance MF’s assets shrinking by over Rs 5,000 crore.

The industry’s AUM fell by Rs 37,904 crore, or 5.31%, in October-December period. The combined average AUM of 40 fund houses stood at Rs 6,75,376.97 crore at the end of December, according to industry body Amfi.

At the end of December 2010, the AUM of Reliance Mutual Fund stood at Rs 1,02,066.21 crore, a decline of Rs 5,682.32 crore or 5.27% from the assets managed in September-end.

HDFC MF also saw its asset base shrink by Rs 5,222 crore, or 5.61%, to Rs 87,883.09 crore. ICICI Prudential MF’s assets declined by Rs 3,886 crore, or 5.57%, to Rs 65,841 crore. Among the other fund houses, UTI MF’s assets fell by 3.29% to Rs 65,387 crore and LIC MF’s by 5% to Rs 18,695 crore.

However, a few fund houses, like Axis MF, Benchmark MF, Fidelity MF, Mirae Asset MF and Pramerica MF, among others, saw their assets rise in the range of 4-75% during this period.

Mirae Asset Global Investments (India) chief executive Arindam Ghosh said, “We have introduced different product mix during the December quarter. This has led to an increase in inflows into several schemes. We mostly have equity funds.”

Source: http://economictimes.indiatimes.com/markets/stocks/market-news/mutual-funds-aum-drops-5-in-october-december-quarter/articleshow/7220422.cms

Tata MF announces dividend under Tata Equity P/E Fund (Dividend Trigger Option A-5%)

Tata Mutual Fund has announced 10 January 2011 as the record date for declaration of dividend under Tata Equity P/E Fund (Dividend Trigger Option A-5%) on the face value of Rs. 10 per unit.

The fund house has decided to distribute Rs. 1.75 per unit as dividend on the record date. The scheme recorded NAV of Rs. 40.6090 per unit as on 3 January 2011.

Tata Equity P/E Fund (Dividend Trigger Option A-5%) is an open ended equity fund. The investment objective is to provide reasonable & regular income alongwith possible capital appreciation to its unitholders.

Source: http://www.indiainfoline.com/Markets/News/Tata-MF-announces-dividend-under-Tata-Equity-PE-Fund-Dividend-Trigger-Option-A-5-percent-/3469840759

Sundaram PSU Opprtunities Fund declares maiden dividend

Sundaram Mutual Fund has declared a maiden dividend of 10% (Rs 1.0 per unit on a face value of Rs 10) under the dividend option of Sundaram PSU Opprtunities Fund. The record date for dividend has been fixed as January 07, 2011.

All investors registered under the dividend option of Sundaram PSU Opprtunities Fund as on January 07, 2011will receive the dividend. The NAV of the scheme as on January 03, 2011 is Rs 11.855 per unit.

Sundaram PSU Opprtunities Fund is an open ended equity scheme. The primary investment objective of the scheme is to generate consistent long term returns by investing predominantly in equity / equity related instruments of public sector companies.

Source: http://www.moneycontrol.com/news/mf-news/sundaram-psu-opprtunities-fund-declares-maiden-dividend_510209.html