DSP Blackrock launches DSP Blackrock Focus 25 Fund

DSP Blackrock Mutual Fund announced the launch of DSP Blackrock Focus 25 Fund. This is an open ended equity growth scheme investing largely in companies, which are amongst the top 200 companies by market capitalization. The Focus 25 Fund is scheduled to open on 23 April and closes on 21 May.

Source: www.karvymfs.com

Sebi may cap PMS fees on realty fund

The Securities and Exchange Board of India (Sebi) is considering a cap on the fees charged by portfolio management service (PMS) providers for their real estate fund, a person familiar with the development told ET. Investors have complained to Sebi that most PMS providers are charging the full management fee upfront, rather than in proportion to the net invested amount.

Source: www.karvymfs.com

Franklin Templeton MF to Wind up Franklin India International Fund

Franklin Templeton Mutual Fund has announced to wind down Franklin India International Fund (FINTF). The scheme will stand wound down as on 30 April 2010. The major reason for it is strengthening of Indian Rupee against the US Dollar since the scheme's launch together with the scheme's performance profile resulted in a sharp reduction in demand for FINTF. Hence, as part of the ongoing product rationalization exercise, the scheme will be wound down.

Accordingly from 22 April 2010 the Trustee and the Asset Management Company shall cease to carry on any business activities in respect of scheme so wound up, create or cancel units in the scheme and issue & redeem units in the plan.

Source: http://www.bloombergutv.com/stock-market/mutual-fund/commentary/388113/franklin-templeton-mf-to-wind-up-franklin-india-international-fund.html

Sales, marketing costs eat into mutual fund profits

While equity assets have doubled in the FY2010 as compared to the previous fiscal, higher sales and marketing costs are to dent profits of the Indian mutual fund houses. A McKinsey report, estimates that over 50% of total costs of an asset management company (AMC) comprise just the sales and marketing expenses.

“Indian mutual fund industry is in the growth phase and in terms of assets is smaller than other developed markets. So in terms of percentage our sales and marketing cost would be higher initially,” said Ved Prakash Chaturvedi, MD, Tata Asset Management. He added, however, that the marketing budgets would be lesser in absolute numbers.

The report also states that in India, while sales and marketing expenses comprised 54% of overall costs, fund management was another 12% and rest (34%) back office and IT infrastructure costs. However, in Western Europe, sales and marketing costs as a proportion of overall costs were much lower. In western europe, while sales and marketing comprised 24% of overall costs, fund management was another 32% with back office/IT expenses forming the rest of the costs (44%). The report further mentions that sales and marketing expenses needs to be effectively managed to enhance profitability. It is estimated that in the year 2000-10, sales and marketing expenses for the entire Indian fund industry has been over Rs 2,000 crore. Bulk of the sales and marketing expenses comprise the brokerage charges. While FY ‘ 10 figures are yet to be disclosed, Reliance Mutual Fund in FY ’09, approximately spent Rs 75 crore as marketing expenses which included Rs 66 crore towards brokerage fees and remaining towards advertisements. For HDFC MF, Rs 44 crore was towards brokerage fees and another Rs 11 crore towards scheme launch expenses in FY ’09. Both the above mutual funds earned Rs 375-400 crore in the form of revenues in FY ‘09.

After the ban on entry load post August ‘09, it seems the sales and marketing costs has escalated even more since mutual fund houses now pay it from their own pockets instead of investors. According to industry experts, several big as well as mid-size fund houses still pay an upfront commission to the distributor of over 1.25-1.5% on new sales.

Source: http://www.financialexpress.com/news/sales-marketing-costs-eat-into-mutual-fund-profits/609558/

Quantum Mutual Fund introduces STP facility under its scheme

Quantum Mutual Fund has decided to introduce daily and weekly Systematic Transfer Plan (STP) under Quantum Liquid Fund. The minimum STP amount for the daily plan is Rs. 100 and in multiples of Rs 100 thereafter and for the weekly plan Rs. 500 and in multiples of Rs 100 thereafter. The minimum number of installments under the STP facility will be 132 and 24 respectively. SIP facility will be available only on mutual fund business days. The investor has to submit STP application at least 10 business days in advance before commencement date of daily STP and weekly STP. This facility came into effect for the investors from 16th April, 2010.

Source: www.karvymfs.com

Sundaram Fin to buy out BNP in JV

Chennai-based Sundaram Finance Group is set to buy French bank BNP Paribas’ 49.90% stake in their domestic mutual fund joint venture, Sundaram BNP Paribas Asset Management.

The decision comes after the Securities and Exchange Board of India (Sebi) earlier this year asked BNP, which also owns Fortis Mutual Fund here, to limit its exposure to the Indian mutual fund industry through a single entity.

BNP Paribas had bought a stake in Sundaram Finance’s mutual fund in 2005. But, last year, Fortis Mutual Fund came under the French bank’s umbrella after it acquired Belgium-based Fortis Bank’s various international operations, including the domestic mutual fund business.

As rules do not allow one firm to own stakes in more than one Indian asset management companies, market regulator Sebi set a deadline of March 31 for BNP to decide on how it wanted to operate in India’s 36 member-strong mutual fund industry.

While conveying to Sebi the decision to sell its stake in Sundaram BNP Paribas Asset Management, BNP has sought approval to conclude the deal by June, said a person close to the matter. ET could not ascertain how much Sundaram will shell out to buy the stake.

In a response to ET’s email questionnaire, a BNP spokesperson said, “We do not comment on this story. BNP Paribas studies (sic) the various strategic options on the Indian market.” Sundaram Finance officials could not be reached for comment. BNP had the option of selling its stake in Sundaram BNP Paribas Asset Management or push for the merger of Fortis Mutual Fund with the mutual fund joint venture, said another person in the know.

Sundaram BNP Paribas’ merger with Fortis Mutual Fund would have resulted in Sundaram Finance owning a lower stake in the new entity, unless it wanted to pump in more money.

“The thinking in the Sundaram Finance camp has been to buy BNP’s stake (in Sundaram BNP Paribas Asset Management) and own the entire company rather than pump money into an entity where they have a lesser say,” the person in the know said. “Also, there is discomfort at Fortis’s assets being mostly debt,” he added.

Fortis Mutual Fund managed assets worth Rs 7,889 crore, as on March 31. Sundaram BNP Paribas Asset Management managed assets worth Rs 13,877 crore as on March 31. The mutual fund industry had assets under management worth about Rs 7.5 lakh crore in the period. Industry officials said Sundaram Finance will probably look to grow its equity assets under management and look for a partner later at higher valuations.

“Roping in a bank with a wider reach as partner would be a good strategy at a later stage to grow this business (mutual fund),” said a senior official with a private mutual fund.

Source: http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/Sundaram-Fin-to-buy-out-BNP-in-JV/articleshow/5841925.cms

Value Research joins hands with UK-based Financial Express

Mutual fund research firm, Value Research has joined hands with UK-based Financial Express to launch Value Express, a complete solution in investment data management that is designed to help asset management companies (AMC), retail investors and financial advisors to make sound investment decisions, a company statement said here.

Financial Express is UK's number one provider of mutual fund data and analytical tools.

"Value Express would offer an overall holistic approach to data, information management and dissemination that would produce excellent results due to the economies of scale and consistency of approach," Value Research Founder, Dhirendra Kumar told reporters here.

It will also assist the maintenance of existing services in relation to market changes, and the development of future services.

Our partnership with Financial Express will allow us to provide world-class services to the Indian market and its customer-driven approach will enable mutual fund companies of India to achieve higher levels of support and service in a cost-effective manner and with much reduced timescales, Kumar said.

Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/Value-Research-joins-hands-with-UK-based-Financial-Express/articleshow/5840335.cms

SBI Mutual Fund may get a new owner

SBI Mutual Fund’s ownership may soon see a change, with its shareholder Societe Generale Asset Management merging with Credit Agricole Group’s asset management arm globally earlier this year to form a new entity, Amundi.

SBI owns 63% in SBI MF, while France’s Societe Generale Asset Management owns 37%. Sources said SBI MF, which has assets under management worth around Rs 37,000 crore, has sought Sebi’s approval to effect the change in ownership following the merger. A person familiar with the matter said the change will be only in the name of the shareholder, but will not impact the shareholding pattern.

Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/SBI-Mutual-Fund-may-get-a-new-owner/articleshow/5837964.cms