IDBI unveils Short Term Bond Fund

Fixed income funds seem to be the flavor of the season as interest rates head northwards and equity markets continue to remain jittery. IDBI Mutual Fund has today announced the launch of its open ended IDBI Short Term Bond Fund to capture this mood.

NFO Date: March 17, 2011 to March 22, 2011.

Investment objective: The scheme aims to provide investors with regular income for their investment. The Scheme will endeavour to achieve this objective through an allocation of the investment corpus in a diversified portfolio of debt and money market instruments.

Asset Allocation: The scheme would allocate 65 to 100 per cent of assets in money market instruments/ debt instruments with maturity/residual maturity up to and including 2 years with low risk profile. The scheme would further allocate up to 35 per cent of assets in debt instruments with low to medium risk profile.

Minimum Application: Rs 5,000

Investor need it seeks to fulfill: “It is both an accrual as well as mark-to-market risk reward product. It is positioned to give higher returns than liquid or ultra short term funds given the high interest rate scenario in sub one year segment,” said Krishnamurthy Vijayan, MD & CEO, IDBI Mutual Fund.

Target Investors: The fund is targeted at all segments of investors looking at an investment horizon of 6 months to 1 year.

Distribution: The fund would be marketed mainly through IFAs, national distributors and corporates. The fund would be available pan-India.

Empanelled IFAs: Approximately 3,000

Exit Load: 0.50 per cent if units are redeemed within 3 months from the date of allotment.

Fund Manager: The scheme will be managed by Gautam Kaul

Benchmark: Crisil Short Term Bond Fund Index

Source: http://www.cafemutual.com/News/InnerNews.aspx?srno=388&MainType=New&NewsType=NFO&id=

HDFC Mutual Fund announces dividend under two equity schemes

HDFC Mutual Fund has declared dividend under HDFC Equity Fund and HDFC Long Term Equity Fund, on the face value of Rs 10 per unit. The quantum of dividend for distribution is Rs 4 per unit. HDFC Equity Fund is an open-ended growth scheme with an investment objective to achieve capital appreciation. HDFC Long Term Equity Fund is an open-ended equity scheme and has the investment objective to achieve long term capital appreciation. The record date for dividend distribution is 22nd March 2011.

Source: http://www.mutualfundsindia.com/news_viwe.asp?news_headline=HDFC+Mutual+Fund+announces+dividend+under+two+equity+schemes@MF041

Goldman Sachs AMC to buy Benchmark MF for Rs 130.5 crore

Goldman Sachs Asset Management Company said on Wednesday that it would acquire Benchmark Mutual Fund, an ETF-focussed Indian fund house. Benchmark mutual fund manages assets worth around Rs 3000 crore.

The deal would be finalised by the end of the year, subject to regulatory approvals, said a statement from Goldman Sachs.

An official associated with the deal said Goldman would pay Rs 130.5 crore or approximately 4.3 per cent of Benchmark's average assets under management (AUM). All Benchmark employees would be retained by the new management, he added. Regulatory approval is expected in the next 3-4 months.

Through the deal, Goldman Sachs aims to bring actively managed on-shore funds into India, added the statement. The financial services major has an office in Mumbai with eight employees, providing research on Indian and BRIC equities for offshore funds.

Goldman Sachs officials could not be contacted for further details.

Benchmark is the country's only fund house with a sole focus on exchange-traded funds (ETFs). The fund house manages eight ETF products and is credited with launching India's first ETF – Nifty BeES. The average AUM for ETFs in India is Rs 5,979 crore, according to the Association of Mutual Funds in India. The gold ETF segment has an AUM of about Rs 3,744 crore with 10 products. India's first Gold ETF – Gold BeES – was conceptualised by Benchmark back in 2007.

MAPE Advisory advised Benchmark in the deal. The Indian MF industry will see further consolidation as the markets become volatile and tough, and big mutual fund players find valuations attractive,” said an industry analyst.

Though Goldman Sachs had received SEBI nod to enter India in September 2008, it kept plans on hold following the economic downturn of 2009.

Source: http://www.thehindubusinessline.com/markets/article1544277.ece?homepage=true

Soumendra Nath Lahiri joins Canara Robeco

Canara Robeco Asset Management Company has appointed Mr Soumendra Nath Lahiri as its Head of Equities effective from April 1.

In his new role, Mr Lahiri will be responsible for managing the equity funds that form a major part of Canara Robeco’s portfolio including Canara Robeco Equity Diversified Fund and Canara Robeco Equity Tax Saver Fund.

Prior to joining Canara Robeco, Mr Lahiri was Senior Vice President and Co-Head, Equities with DSP Black Rock Asset Management Company. He was also recently appointed as Chief Investment Officer at Emkay Global Services.

“We are extremely happy about Mr Soumendra Lahiri joining the team. We look forward to utilising his experience in taking the company forward. His understanding of the markets will add a lot of value to our clients and the entire team will benefit from his knowledge and guidance,” Canara Robeco Asset Management Company’s Chief Executive Officer, Mr Rajnish Narula, said in a statement.

Canara Robeco is a JV between Canara Bank, a 100-year old premier bank in India and Robeco, an 80-year old Rabobank entity and an asset management specialist.

Source: http://www.thehindubusinessline.com/industry-and-economy/banking/article1540431.ece

SBI Mutual Fund announces dividend under SBI Magnum Taxgain Scheme 1993

SBI Mutual Fund has declared a dividend of 40% ((Rs. 4.00 per unit on Face Value of Rs.10) under dividend option of SBI Magnum Taxgain Scheme 1993. The record date for dividend has been fixed as March 18, 2011.

All investors registered in the dividend plan of SBI Magnum Taxgain Scheme 1993 as on March 18, 2011 will receive this dividend. The NAV of the scheme as on March 14, 2011 under the dividend option was Rs. 39.13.

SBI Magnum Taxgain Scheme 1993, is an open ended ELSS Scheme. The objective of the scheme is to deliver the benefit of investment in a portfolio of equity shares, while offering deduction on such investments made in the scheme under section 80C of the Income Tax Act, 1961 and (b) Distribute income periodically depending on distributable surplus.

Source: http://www.moneycontrol.com/news/mf-news/sbi-magnum-taxgain-scheme-1993-declares-dividend-_529645.html

Is Sebi getting ready to reload?

For an industry waiting with bated breath for the new regulator to indicate which way the wind will blow, the two-page circular uploaded on the Securities and Exchange Board of India (Sebi) website on 9 March 2011 quickly became the most emailed and forwarded document. Through the circular, Sebi has allowed mutual fund houses to use two sources of money to pay distributor commissions. One, they can use the accumulated load balances they are holding. Before August 2009, the loads (the distributor commission embedded in the price of the mutual fund scheme) were collected by the fund house and paid to the distributor. Not all such loads were paid out and the money undistributed was kept in a separate account. The older and bigger the fund house, the larger was this amount of accumulated loads. The circular is being seen in the market as of great benefit to the older, larger fund houses that are sitting on Rs250-400 crore each in these accounts. This is a reversal of the earlier argument within Sebi that was in favour of writing back this money to the scheme (that is to the investors). Two, fund houses can use the money collected as exit loads to pay distributors. Both the steps are being seen as a significant indication of what will happen next. The market now expects the two-cheque system to collapse into one and a gentler easing into the pre-August 2009 world when fund houses looked at the distributors as their primary customers and the real retail customer was not really on the radar. When you can buy the business, why spend energy in developing it?

But how badly has the industry been affected by the banning of loads? How much was the bleed? I did a small dipstick and found that even informed people thought that the equity funds bled heavily and lost about half their money due to distributors refusing to sell funds and investors getting out in the 18 months since the no-load rule. The truth is a little different. I found (looking at Association of Mutual Funds of India data) that the worst month since August 2009, in terms of outflows, was September 2010 when a net of almost Rs8,000 crore bled out of equity funds, with a gross bleed of just over Rs13,000 crore and an inflow of almost Rs7,00 crore. But this Rs8,000 crore of net redemption was a mere 3.66% of the total equity assets under management (AUM) of Indian investors who hold over Rs2 trillion in equity funds. Right. At the worst point, less than 2% of the money bled out.

In fact, the September numbers prompted an insurance chief, who met me at an airport in mid-October, to confidently predict the demise of the fund industry by December 2010. “They’re dead!” he crowed, “and the business is all coming to us.” The good thing with predictions about the near future is that they can be remembered and validated. February 2011 became the fourth month with positive inflows into equity funds. With more than Rs7,000 crore coming in and almost Rs4,000 crore going out, the net inflows of Rs3,500 crore are 1.93% of the total AUM of equity funds in India. In fact, November to February has seen a spurt in inflows and a decline in redemptions. The reasons for this could be two. One, market volatility is making investors wary of exiting and hence the reduction of redemptions by half in February over the previous month. Or that fund houses are stabilizing into the new no-load world and investors are coming in using the systematic investment plan road. The gross inflows have picked up steam, with an average Rs7,000 crore coming in the last four months, against an average Rs6,000 crore in the 15 months before November 2010.

Could it be that the inflows are coming back in due to fund houses finally getting out of their Nariman Point and Bandra-Kurla offices and getting to the investors through direct sales pitches, through customized products, through investor awareness drives? Could it be that the AUM-focused fund houses in search for valuation are now trying to grow the retail business now that the corporate loopholes are mostly plugged? While it is too soon to say that the industry is settling down, there is clearly a new focus at least within some of the fund houses. From throwing money at the distributors, fund houses are actually thinking about how to get the retail investor. Maybe the new Sebi chief should allow fund houses some more gym time for workouts. They may realize that the crutches of loads are actually not needed.

Source: http://www.livemint.com/2011/03/15212715/Is-Sebi-getting-ready-to-reloa.html?h=B