'SIP' peaks on Google search, attracts investors from small cities

As stocks scale new highs and return from bank deposits dip, even regions that are not typically known as investor hubs are becoming more and more curious about 'Systematic Investment Plan' or SIP.

The search for the keyword, 'Systematic Investment Plan' (SIP), using the Google search engine has peaked. Contrary to general perception, an overwhelming number of people in states like Jharkhand, Sikkim, and Haryana - where Assets Under Management (AUM) as a percentage of respective state domestic products (SDP) is low - are trying to find out more about SIPs.

According to Google data compiled by ETIG, the search for `SIP' has touched a peak score of 100 - a 5-year high. Google score of 100 indicates peak popularity of a term in a defined time frame.


For instance, the search interest for `SIP' is the highest in Jharkhand among all states, an interest score of 100. The eastern state with per capita investment of Rs 3,830 in mutual funds and Rs 12,600 crore of AUM accounts for 0.6 per cent of the total AUM in the country.

Sikkim -with interest score of 89 for Rs SIP' -has per capital investment of Rs 15,010 in MFs -accounts for 0.1 per cent of the total AUM. Surprisingly, no fund house runs a branch in the state.

The total number of SIP accounts in India has grown at a pace that has shadowed the surge in interest on the product. In the past three years, the number of SIP accounts increased from 68 lakh to 1.45 crore in June 2017.

In the past few months, about 7-7.75 lakh SIP accounts have been added with an average investment size of Rs 3,000 per account, according to the Association of Mutual fund of India (AMFI). The average ticket size of SIPs for the same period last year was around Rs 2,200.

The nature of search on the Internet also reflects the entry of otherwise risk averse new investors who are keen to ride the equity boom. For instance, the interest score of 'top mutual funds' has a high positive correlation with the interest score of Rs SIP.'

Globally, the interest score for the term 'best mutual funds' is the highest in India, followed by unrelated terms such as Rs US' and Rs Canada'.

The total SIP book of local MFs was $736 million in June 2017. During FY 16-17, Rs 43,921 crore was collected through SIPs, which is equivalent to 72 per cent of the total inflow into MFs.

What's driving the growth in SIP investments? Most retail investors have found SIPs to a convenient and relatively safer way to participate in equities without timing the market. Also, the ticket size can be as low as Rs 500 a month.


Source : Economic Times

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IDFC buys Natixis’s stake in mutual fund unit for Rs 244 crore

Financial services major IDFC has decided to buy Natixis Global Asset Management’s 25 per cent stake in IDFC Mutual Fund for over Rs 244 crore. The shares will be purchased through IDFC Financial Holding Company, a wholly-owned subsidiary of IDFC.

“The transaction is in line with the terms of the shareholders agreement that we signed with Natixis six years ago,” IDFC Managing Director and Chief Executive Officer Vikram Limaye told PTI.

IDFC Financial Holding Company holds 75 per cent stake of IDFC Asset Management Company (AMC) and IDFC AMC Trustee Company. The remaining 25 per cent stake is held by Natixis.

In December 2010, Natixis had entered into a share purchase agreement to pick stake in IDFC AMC and IDFC AMC Trustee.

As part of the agreement, there was a requirement that both shareholders would review the partnership at the end of five years.

Following a review clause in the agreement, IDFC “agreed to acquire through IDFC Financial Holding Company the balance stake (about 25 per cent) in IDFC AMC and IDFC AMC Trustee from Natixis Global Asset Management”, the financial major said in a filing. It has agreed to buy the stake for Rs 244.24 crore.

The deal, subject to regulatory approvals, is expected to conclude by the end of this month. IDFC AMC is among the top 10 firms in the mutual fund space with an assets base of Rs 57,998 crore at the end of December quarter. The turnover of the fund house stood at Rs 325 crore at the end of March 31, 2016.

Currently, there are 42 players in the mutual fund industry that manage assets worth more than Rs 17 lakh crore.

“Our agreement with Natixis had a clause which required us to distribute all our international products through Natixis only but after the conclusion of deal we will own 100 per cent of the business then we have the flexibility to think about exploring distribution and or strategic partnerships with others as well.

“Our relationship with Natixis has been very good and nothing prevents us from using the Natixis distribution,” Limaye said.

IDFC AMC, which manages a range of funds across debt and equity classes, has several new products in credit and balance fund category.

Limaye said that the company is focusing on portfolio management services (PMS) business quite aggressively.


Source : Financial Express

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All you need to know about saving taxes using ELSS

The last month of the financial year sees investors rushing to save tax by investing in tax-saving instruments. You can save tax by investing upto Rs 1.5 lakh in equity-linked savings scheme (ELSS) under section 80C of the Income Tax Act.

What are tax saving or ELSS schemes? How much can one invest in them?

An equity-linked savings scheme (ELSS) is a mutual fund that gives the option to save tax. These funds invest in equities and investors can choose the dividend or growth options. You can invest any amount up to 1.5 lakh in an ELSS scheme to save tax.

ELSS schemes offer growth and give investors the opportunity to earn higher returns in the long run. However, as is the case with all mutual fund schemes, there is no guarantee of any fixed returns.

What is the process to invest in an ELSS scheme?

Once an investor is KYC compliant, he can invest in an ELSS scheme just like any other mutual fund scheme.

Investment can be done by writing a cheque and filling the relevant form, or can be also done on line.

Does ELSS have any advantage over other tax-saving options under section 80C?

ELSS has the smallest lock-in period of three years.

Compared to this, the Public Provident Fund (PPF) has a minimum lock-in of 15 years, and allows only conditional withdrawal before that. The EPF is usually locked in for the term of your employment. Other tax-saving products like Tax-saving Fixed Deposits, or the National Savings Certificate (NSC) are locked in for a period of five years and above. The National Pension Scheme (NPS) is locked in until you reach 60 years of age, and only allows conditional withdrawals. ELSS also has intermittent cash flows in the form of dividends which are tax free, if one opts for the dividend option. Also, in an ELSS you do not pay any tax on dividend or at the time of redemption.

What should an investor do with his ELSS funds, once the lock-in period is over?

Investors have the option to continue holding the mutual fund units after three years or redeem them. Financial planners say investors could continue holding them if the funds perform in line with their expectations in order to meet their financial goals.


Source : By Prashant Mahesh, THE ECONOMIC TIMES

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SBI Mutual Fund’s AUM likely to cross Rs 1 trillion-mark soon

Assets under management (AUM) of SBI Mutual Fund has crossed Rs.98,000 crore and is soon likely to cross Rs.1 trillion-mark, its managing director said today.

“At SBI MF, we have recently crossed the AUM of Rs.98,000 crore and we are all set to cross the mark of Rs. 1 trillion in near future,” SBI MF Managing Director and CEO Dinesh Khara told PTI here.

He was speaking on the sidelines of an event organised by Indian Chamber of Commerce.

In its bid to increase the subscriber base, the company is currently conducting a host of activities which include making its presence felt in every part of the country through independent financial advisors (IFAs), among others.

“We are currently doing multiple things so as to bring more and more subscribers on board. While we are focusing on online sale, we are also trying to have our presence through IFAs in every nook and corner of the country,” he said.

Talking about the progress of ongoing SBI Equity Opportunities Fund-Series IV, he said, “We have seen good response coming from the investors for the close-ended scheme, which opened on October 7 and will come to a close on October 21.”


Source : Thehindubusinessline

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HDFC Mutual to acquire all 8 schemes of Morgan Stanley

India’s largest mutual fund by assets, HDFC Mutual Fund, has decided to acquire all the eight schemes of Morgan Stanley Mutual Fund in India.

However, HDFC Mutual Fund did not disclose the deal size.

“We are pleased to announce the signing of a definitive agreement for HDFC Mutual Fund to acquire all the eight schemes of Morgan Stanley Mutual Fund in India,” HDFC Mutual said in a statement.

The agreement is subject to regulatory approvals as required, it added.

The average combined assets under management of the eight schemes for the quarter ended September 30, was Rs 3,290 crore, while HDFC Mutual commands an asset base of Rs 1.01 lakh crore.

Milind Barve, Managing Director of HDFC Asset Management Co, said, “HDFC Mutual Fund has acquired a portfolio of strong performing domestic mutual fund schemes from Morgan Stanley and this acquisition is another step towards expanding our mutual fund customer base. We look forward to welcoming the investors in the eight schemes of Morgan Stanley Mutual Fund into the HDFC family.”

Two decades ago, in 1993, Morgan Stanley had received SEBI’s approval to run mutual fund business in India. Its first scheme was launched in 1994.

Fierce competition and slowdown in the asset management industry have since forced many to quit the business.

Earlier this year, SBI Mutual Fund had acquired Daiwa Mutual Fund while last year L&T Mutual Fund bought Fidelity Mutual Fund.

According to SEBI data, the number of folios (individual investor accounts) with 44 fund houses fell to around 4.07 crore at the end of October, from 4.28 crore in fiscal 2012-13.

Source: thehindubusinessline

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IDBI Mutual launches tax saving fund

IDBI Mutual Fund launched an open-ended equity-linked savings scheme (ELSS), ‘IDBI tax saving fund’, with an aim to provide capital appreciation to investors along with tax benefit.

The new offering which will be open for subscription from tomorrow, will close on September 3 and the scheme will re-open for continuous sale from September 17.

“We feel this is the right time for equity investors to enter into the market as the valuations are attractive in many stocks following the recent market crash. Apart from capital appreciation, the new fund will also offer tax savings to the investors,” Debashish Mallick, Chief Executive, IDBI Mutual Fund said here.

He also said the fund house expects to garner around Rs 100 crore during the NFO period.

“We will majorly focus on retail investors for this new scheme,” Mallick said.

When asked about the timing of launch, Mallick said equity funds tend to do well when valuations are at an attractive level as investors benefit in the long run.

Talking on the distribution penetration, Mallick said the fund house is planning to increase the strength of its representative offices.

IDBI MF, promoted by public sector lender IDBI Bank, has a total AUM of around Rs 5,500 crore at the end of June quarter.

Source: thehindubusinessline

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Fund houses flood markets with RGESS new fund offer

As the finance minister extended Rajiv Gandhi Equity Saving Scheme for three successive years and also allowed investors with Rs 12 lakh income to invest in these schemes for tax benefit FY2013-2014 onwards, mutual funds have increased their focus on RGESS. Seven new fund offers are open now to allow investors to tap RGESS to save tax.

Birla Sun Life RGESS, DSP BlackRock RGESS Fund, HDFC RGESS, IDBI RGESS Fund, LIC Nomura MF RGESS Fund Series - 1, and UTI Rajiv Gandhi Equity Saving Scheme are the ongoing new fund offers.

Reliance Mutual Fund has launched R*Shares CNX 100 Fund, an ETF that is compliant with RGESS. "RGESS offers investors an opportunity to take exposure to large cap stocks for long term. This should offer them twin benefits of capital appreciation and tax savings," says Abhinav Angirish, managing director, investonline.in, an online mutual fund distribution entity. It can be a good entry point for first time investors in volatile markets.

First time investors with income below Rs 10 lakh annually, can avail an additional tax benefit under section 80 CCG for maximum investment up to Rs 50,000.

This benefit is over and above the Rs 1 Lakh exemption limit available as regular benefit under Sector 80C. For the next three years the income criteria has been enhanced to Rs 12 lakh per year.


Source: Economictimes

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Sebi relaxes MF exposure limit for HFCs

Providing more leeway for housing finance companies (HFCs), market regulator Sebi today relaxed the investment limit for such entities in debt mutual funds.

The decision to relax the investment limit for housing finance companies (HFCs) was taken by Sebi at its board meeting held in October.

“In light of the important role played by the Housing Finance Companies (HFCs) in the housing sector, it has been decided that an additional exposure not exceeding 10 per cent of net assets of the scheme shall be allowed only to HFCs as part of financial services sector for prudential limits in debt oriented schemes,” Sebi said in a circular today.

The total investment in HFCs shall not exceed 30 per cent of the net assets of the scheme.

The Sebi said the relaxation would be subject to certain conditions such as that the securities issued by HFCs were rated ‘AA’ or above. Also, the HFCs should have been registered with the National Housing Bank (NHB).

In October, the market regulator had said the decision to relax investment limit was taken after taking into consideration the important role played by HFCs in fulfilling the social objective of increased home ownership and supporting the economy by creating demand for construction of new homes.

Certain debt mutual fund schemes, such as long-term fixed maturity plans are a preferred route for the NBFC (Non-Banking Finance Company) sector to raise medium to long term funds at attractive rates.

Under the regulatory framework, NBFCs include HFCs.

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Religare gets nod for 49% stake sale in MF biz to Invesco

Fair trade regulator Competition Commission of India (CCI) today said it has approved Religare group’s 49 per cent stake sale in its mutual fund (MF) business to global investment management firm Invesco.

According to the deal reached in September, the US-based Invesco is acquiring 49 per cent stake in Religare Asset Management Company and Religare Trustee Company Pvt Limited, which manage assets worth over Rs 14,600 crore for Religare group’s mutual fund business.

Invesco is acquiring the stake through a group entity, Invesco Hong Kong Ltd, from Religare Securities Ltd and the deal is estimated to have valued Religare group’s mutual fund business at about Rs 1,000 crore.

In its order dated November 8 and released today, the CCI said that the deal is not likely to have any “appreciable adverse effect on competition in India” as Invesco does not have any direct or indirect presence in the Indian mutual fund and portfolio management services in the country.

The CCI further said that there are more than 40 other registered AMCs (Asset Management Companies) in the country and more than 250 portfolio managers providing their services, implying significant competition prevailing in these markets.

Invesco and Religare group had approached CCI for its approval to the deal in October, pursuant to which the fair trade regulator had sought some additional information. The replies to the CCI queries were submitted on November 1.

The CCI observed that New York-listed Invesco is a global investment manager and provides a wide range of investment products and services to retail and institutional investors across the world.

While Invesco does not engage in any of these activities in India currently, its affiliate in the country, WL Ross (India) Pvt Limited, provides advisory services in relation to private equity investment.

However, it does not operate in the mutual funds and portfolio management services markets in the country, while another affiliate, Invesco (Hyderabad) Pvt Ltd provides IT—enabled services, the CCI observed.

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Sundaram BNP Paribas Fund Services to recruit 100 people

As part of its expansion plans, Sundaram BNP Paribas Fund Services would recruit 100 people across its delivery centres during the next fiscal.

Sundaram BNP Paribas Fund Services is a 51:49 per cent joint venture between the Chennai-based Sundaram Finance Ltd and BNP Paribas Securities Services, a 100 per cent subsidiary of BNP Paribas.

The Chennai-based Sundaram BNP Paribas Fund Services employs 200 people in its two-delivery centres in Chennai and Madurai.

“It expects to hire around 100 people in the next financial year,” a company statement said.

Meanwhile, the company said as part of providing full-fledged fund accounting services, Sundaram BNP Paribas has inked an MoU with Mumbai-based private equity player.

Sundaram BNP Paribas Fund Services said during their first full year of operations, the company successfully migrated over 2.8 million investor files along with 35,000 distributor records.

“The fact that we have achieved transition of almost three million folios with no disruption of services to individual customers and distributors is very fulfilling,” Sundaram BNP Paribas Fund Services, CEO, Shridhar Iyer said.

In 2010, Sundaram Finance and BNP Paribas Securities Services had said they would invest Rs 60 crore in fund services over a three-year period, the statement added.

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Reliance MF signs distribution pact with IOB

Reliance Mutual Fund, a part of Reliance Capital, on Thursday said it has entered into a distribution tie-up with Indian Overseas Bank (IOB).

As per the agreement, IOB will sell Reliance MF products through its 2,689 branches.

“This agreement would help us expand our customer base, especially in tier II and III cities, leveraging on the wide network of the bank,” Reliance Capital Asset Management chief executive Sundeep Sikka said.

Referring to the distribution tie—up, IOB Chairman & Managing Director M Narendra said, “This would enable the bank to operate as a financial super market and help in strengthening the relationship of the existing and potential customer base, providing an opportunity to cross—sell.”

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Union KBC launches Capital Protection Oriented Fund-Series 1

Union KBC Asset Management Company (Union KBC), a subsidiary of Union Bank of India, today launched Capital Protection Oriented Fund - Series 1.

The New Fund Offer will remain open till September 17, the Union KBC said in a release issued here.

"We have equities, an asset class that has historically outperformed debt and cash, and beaten inflation over a medium to long term period, appearing to be relatively attractively priced. However, we also have investors that are nervous to invest because of the recent history of market volatility. This product allows these investors to gain exposure to equities with some degree of comfort about their capital," Union KBC Chief Executive Officer G Pradeepkumar said.

By investing a majority of the funds in highly rated debt and money market instruments, the scheme aims to protect the capital at the time of maturity.

The remaining proportion of the funds will be invested in equity and equity related instruments which may generate a positive return on the initial investment and grow the money.

This scheme is open for investment to individual and non-individual investors and is ideal for investors who do not want to take a major risk on their invested capital but would like exposure to equities.

It is also aimed at first time Mutual Fund investors who have traditionally only invested in fixed income instruments, but would like to participate in the returns offered by the Indian equity markets.

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Reliance Capital gets RBI nod for mutual fund business stake sale

The Reserve Bank of India has approved Anil Ambani-led Reliance Group's Rs 1,450 crore stake sale in its mutual fund business unit to Japan's Nippon Life.

The diversified conglomerate's financial services arm Reliance Capital is selling 26 per cent stake in RCAM (Reliance Capital Asset Management Company) to Nippon Life for Rs 1,450 crore - making it the largest ever Foreign Direct Investment (FDI) in the Indian mutual fund space.

Sources said that RBI has cleared the deal, bringing it a step closer towards its completion. The transaction has already been cleared by the Competition Commission of India (CCI) and might be completed soon after achieving a couple of more remaining regulatory approvals, they added.

"We have no objection to your company transferring 26 per cent of the issued and paid-up equity shares in RCAM to Nippon Life," RBI communicated to the company in a letter dated June 7, 2012.

The Nippon Life transaction values RCAM, the country's most profitable fund house, at about Rs 5,600 crore.

The final agreements for this deal was signed in late March this year.

Reliance Capital has already completed another deal with Nippon Life, wherein the Japanese financial services giant has acquired 26 per cent stake in Reliance Life Insurance for Rs 3,100 crore, valuing the life insurance venture at about Rs 11,500 crore.

For the last fiscal ended March 31, 2012, RCAM posted a net profit of Rs 276 crore, retaining its position as the country's most profitable fund house for the second year.

The company's profit after tax grew by over five per cent from Rs 261 crore in the previous fiscal 2011-12. Its profit before tax also grew by five per cent to Rs 308 crore in the fiscal ended March 31, 2012.

Reliance Capital AMC (Asset Management Company) had overtaken HDFC AMC as the country's most profitable fund house during the previous fiscal 2010-11 and has managed to retain its leadership position.

Reliance Capital Asset Management managed Rs 1,40,853 crore ($27.5 billion) as on March 31, 2012, across mutual funds, pension funds, managed accounts and hedge funds.

Reliance Mutual Fund figures among the top two mutual funds in India, in terms of AUM, with market share of nearly 12 per cent and its average AUM stood at Rs 78,112 crore for the period ended March 31, 2012.



Source: EconomicTimes

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Air India begins sounding LIC and mutual funds for bond sale

Government-owned Air India, which is to issue non-convertible debentures (NCDs) to raise funds for repaying its debt mountain, has begun informally sounding Life Insurance Corporation (LIC) of India, mutual fund houses and government-owned non-life insurance companies to subscribe to the issue, bankers said.

Permission from a group of ministers came yesterday for the NCD issue, as part of a debt recast plan; it has still to be approved by the Cabinet.

The NCDs are, goes the proposal, to be guaranteed by the government and aimed to raise Rs 7,400 crore. They’d have a 20-year maturity and carry a slightly higher coupon rate than comparable government securities.

At present, the yield on government bonds maturing in 2030 is 8.55 per cent, according to Clearing Corporation of India data.

Sources said AI and merchant bankers to the issue would make a detailed presentation to prospective investors within the next few days. “We are yet to receive any formal proposal from Air India, but we will look into it. Since AI bonds will be government-guaranteed, these will be safe investments,” said a top LIC official.

Funds won’t be a problem for the insurance behemoth and it has plans to invest Rs 80,000 crore in debt and equities during the January-March period of the current financial year.

Of this, Rs 60,000-75,000 crore would be invested in debt instruments, with the rest to equities. So far during 2011-12, the largest life insurer in the country has invested Rs 1.15 lakh crore, of which Rs 25,000 crore was in equities.

Of around Rs 90,000 crore debt investments, a large part has gone to government securities and 25-30 per cent in corporate instruments. In 2010-11, LIC invested Rs 1.95 lakh crore, of which Rs 43,000 crore was in equities.

Of total AI debt of Rs 43,000 crore, as much as Rs 22,500 crore was proposed for restructuring. While Air India will pay back Rs 7,400 crore to banks, the remaining amount will be converted into long-term loans, with an interest rate of 11 per cent.

Due to the recast, banks have to make a provision of around Rs 2,000 crore. A consortium of 26 banks, including Punjab National Bank, Bank of Baroda and Central Bank of India, with State Bank of India as the lead institution, have exposure to the troubled carrier.

The Reserve Bank of India has said the restructuring should be completed by March 20, failing which banks have to classify the exposure as a non-performing asset.

Source: Business Standard

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MF Global shortfall may be up to $1.2 bn

The shortfall in MF Global Inc’s US segregated customer accounts may exceed $1.2 billion, more than double what was previously expected, said a trustee overseeing a liquidation of the failed brokerage.

That would mean customer accounts are missing about 22 per cent of their total of $5.4 billion. A shortfall of 11 per cent had been previously estimated by a person with knowledge of probes into the firm’s collapse. James Giddens, the trustee, said yesterday that forensic accountants and investigators were working “around the clock,” and the estimate may change.

“Our goal is still a 100 per cent return, and right now, we’re very close to 60 per cent,” said Kent Jarrell, a spokesman for the trustee. “If we continue to recover more, that will determine how much more we can distribute.”

Jarrell said the $1.2 billion estimate came from the team of accountants and investigators who met with the trustee last night, prompting him to publish the revised figure. The spokesman declined to comment on whether there was news as to who was responsible for the funds or how they were withdrawn or used, citing ongoing investigations from the Department of Justice and other agencies.

ASSETS UNDER CONTROL

Giddens said distributing 60 per cent of what should have been in commodity customers’ accounts, already under way, would take $1.3 billion to $1.6 billion, or almost all of the assets he had within his control. While he expected the transfer to occur in early December, he didn’t have access to funds beyond $1.6 billion, he said.

The shortfall is primarily in commodity accounts. Money frozen in securities accounts will be refunded through a separate segregated account, Jarrell said. MF Global had 38,000 commodity clients. “He is very close to exhausting the funds under his control,” according to the statement. Recovering funds from foreign depositories may take more time, Giddens said.

Source: Business Standard

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Bank of India likely to relaunch mutual fund biz by December

MUMBAI, NOV 20: Bank of India has decided to advance its proposed re—entry into the mutual fund business by a few months to December.

“We are working on it (MF business)... by December, I suppose we should have something in place,” Bank of India chairman and managing director, Mr Alok Misra, told PTI.

He refused to give more details on the business model saying the bank is working out the details. He also refused to say whether it will be a joint venture or not.

Earlier this year, the bank had said it would launch its MF business by early 2012 and was scouting for a partner.

It was also reportedly in talks with Bharti Axa Investment Managers and Pramerica AMC which were planning to sell their stakes.

BoI was in the MF business in 1990. Of the six schemes launched by the fund, four had been redeemed and two schemes transferred to Tauras Mutual Fund after giving exit option to investors in 2004.

Banks generally enter the MF space as they can leverage on their branches for distribution, which in turn would help cut cost of delivery, thus improving business efficiency.

Currently, there are eight MFs either fully or partly owned by banks along with overseas partners. These include Baroda Pioneer Mutual Fund, Canara Robeco Mutual Fund, ICICI Prudential MF, Principal MF of PNB and SBI Mutual Fund, Axis MF, IDBI Mutual Fund and Union KBC MF of Union Bank.

There are 40 MF players in the country with average asset under management of over Rs 7 trillion.

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Bajaj Finserv gets SEBI approval for mutual fund business

MUMBAI: Bajaj FinServ, the financial services arm of Bajaj Group, has received approval from the capital markets regulator Sebi for setting up mutual fund business and is likely to enter the fray by end-2012, a top official said today.

"We have received the Sebi approval and are evaluating the right business model," the company's Managing Director Sanjiv Bajaj told reporters on the sidelines of the India Economic Summit of the World Economic Forum here.

He, however, said the company's consumer lending business may be hit going forward.

"Going ahead, it(consumer lending) will slow down. Consumer lending is the last one to be affected in a high rates cycle and I see some impact on the vertical," Bajaj said.

Bajaj FinServ's business plans continue to be "steady" even as fears of a slowdown are being expressed, he said.

"The market is large enough for us to find our attractive business," he said adding that a lot remains to be done on the inflation front.

Bajaj Finserv posted a more than two times rise in its net profit at Rs 158 crore in the second quarter of current fiscal on the back of sound rise in income in its general, and life insurance business among others.

Net profit during the July-September period of the company was at Rs 69 crore.

Total income during this period rose by 52 per cent to Rs 714 crore compared to Rs 471 crore reported an year ago period.

Source: EconomicTimes

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Mutual funds hike exposure to Reliance Industries; lower valuations attractive

NEW DELHI: Shares of Mukesh Ambani-led Reliance Industries may have traded weak on the bourses in the recent months, but mutual funds have enhanced their exposure to the stock, attracted by its lower valuation.

More than 200 mutual fund schemes purchased fresh RIL ( Reliance Industries Ltd) shares, worth an estimated Rs 1,500 crore at current value, during the last quarter.

In contrast, about 100 schemes sold RIL shares from their portfolio during the quarter ended September 30. These shares are worth about Rs 350 crore at the current market price.

The MF schemes having purchased fresh RIL shares during the quarter also included those from Anil Ambani-led group's Reliance MF, the country's biggest fund house.

Interestingly, the RIL stock fell sharply by about 11 per cent during the July-September 2011 quarter.

In the past one year, RIL stock has dipped by over 20 per cent and hit a 52-week low of Rs 713.55 on August 26, 2011 and is currently trading near Rs 884 level.

But, RIL figures prominently on the portfolios of various MF schemes, by virtue of being the country's most valued firm and its high weightage on key market indices including Sensex.

MFs collect money from various investors, including the retail participants, for their different schemes and then invests the same in stocks, bonds and other securities.

One fund house generally runs a number of schemes for different market segments.

RIL is the second most-held stock after ICICI Bank by all the fund houses together. It figures on the portfolios of more than 300 MF schemes and all the funds together held RIL shares worth about Rs 6,800 crore at the end of September.

An analysis of quarterly portfolio disclosures of various funds shows that as many as 210 schemes together bought more than 1.7 crore fresh shares of RIL during the last quarter.

On the other hand, about 41 lakh RIL shares were sold by a total of 97 MF schemes during the quarter.

Only two schemes, belonging to Franklin Templton MF, had no change in their RIL holding during the quarter.

Those having sold RIL shares included only one Reliance MF scheme, while about a dozen schemes of the fund house purchased fresh RIL shares during the quarter.

Besides, the shares were also bought by various schemes of ICICI Pru, UTI, HDFC, Birla Sunlife and Franklin Templeton.

Interestingly, Reliance MF had lowered its exposure to RIL in the last fiscal.

On its part, RIL continued to avoid Reliance MF for its investment needs during the fiscal ended March 31, 2011, even as it parked money in a host of schemes from other funds.

A host of other funds had cut their RIL exposure during the last fiscal and the stock lost its position as the top- held stock for overall mutual fund space to ICICI Bank.

Source: EconomicTimes

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Franklin Templeton unveils Corporate Bond Fund

Mumbai: Franklin Templeton Investments has launched a NFO 'Templeton India Corporate Bond Opportunities Fund' aiming to help investors take advantage of the current high yields and to build a strong presence in pure fixed income space.

The new fund offer (NFO), opens for subscription on November 15 and closes on November 29.

The fund also aims at allowing capitalisation on opportunities by active interplay on credit, liquidity and interest rate opportunities, Franklin Templeton said in a release.

"We believe that the corporate bond market provides good opportunities in India for multiple reasons, including a fast growing economy, strong corporate balance sheets and expected increase in issuances. However, when compared to other similar markets, the corporate bond market in India is still at a nascent stage and is growing," Franklin Templeton India President Harshendu Bindal said.

The fund helps investors to take advantage of the current high yields and also potentially benefit from the capital gains once the interest cycle turns.

"The interest in corporate bonds is likely to grow, both from domestic and foreign investors. In the current environment, we expect corporate bonds in the 1-3 year segment to outperform, due to relatively higher spreads and the fund will benefit from higher accruals in the coming quarters," the asset management firm's Chief Investment Officer for fixed income Santosh Kamath said.

The minimum investment in the scheme is Rs 5,000, and a three percent interest will be charged if the investor exits within a year, 2 percent after a year but before two years and 1 percent after two years but before two-and-a-half years.

At the end of September quarter, Franklin Templeton managed average assets worth Rs 34,410.37 crore.

Source: Financial Express

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IDBI Gold ETF NFO collects over Rs 110 cr

Mumbai: IDBI Gold Exchange Traded Fund, the new fund offer (NFO) launched by IDBI Asset Management, has collected over Rs 110 crore, predominantly from around 11,000 retail investors, including HNIs.

The NFO was open for subscription between October 19 and November 2 and the units will be allotted on November 9.

"In the current scenario of inflation and economic uncertainties, investment in gold could be viewed as a good hedge and prudent asset allocation strategy. We have collected over Rs 110 crore, predominantly from around 11,000 retail investors, including HNIs," IDBI Asset Management Managing Director and Chief Executive Officer, Debasish Mallick said in a statement here.

IDBI Gold ETF is designed with the purpose to invest in 'physical gold' with an objective to replicate the performance of gold in domestic prices. The Fund will adopt a passive investment strategy and seek to achieve investment objectives of scheme by minimising the tracking error between the fund and the underlying asset.

The NFO will be listed on NSE and BSE with effect from November 17, the release added.

Source: Financial Express

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