Birla Sun Life posts highest growth of 31.17% amongst Top 5 MFs

The nine Mutual Funds, which posted the growth, are Birla Sun Life Mutual Fund, Baroda Pioneer MF, Canara Robeco MF, Escorts MF, HDFC MF, IDFC MF, JP Morgan MF, Kotak Mahindra MF and LIC MF.
Nine Mutual Fund companies out of 37 Mutual Funds (33 AMCs) grew their average assets under management (AAUM) by Rs. 384.10bn as of March 31, 2009, as compared to March 2008 (Source AMFI data).
And this growth arrested the slide and ensured that the industry’s AAUM y-o-y (March 2009 to March 2008) fell by 7% and not 14% (double the fall posted as of March 2009 as compared to March 2008).
The nine Mutual Funds, which posted the growth, are Birla Sun Life Mutual Fund, Baroda Pioneer MF, Canara Robeco MF, Escorts MF, HDFC MF, IDFC MF, JP Morgan MF, Kotak Mahindra MF and LIC MF. In fact, only Birla MF and HDFC MF amongst the Top MFs have posted a positive growth.
Birla Sun Life Mutual Fund (BSLMF) posted an absolute increase of Rs. 111.90bn
and a growth of 31.17% in its AAUM of March 2009 over March 2008. This growth is higher than that of HDFC MF (29.44%), Reliance MF (-10.97%), ICICI Prudential ( - 5.32%) and UTI MF (-0.47%).
BSLMF contributed 29.13% (absolute of Rs. 11,190.19 crore) to the overall growth in AAUM of Rs. 38,4.10bn. Amongst the 9 MFs that have posted positive growth, only BSLMF and HDFC MF have posted an absolute increase of over Rs. 100bn in AAUM while LIC MF comes close with Rs. 90.36bn.
BSLMF also increased its market share to 9.7% (up nearly 43%) as of March 2009 as compared to March 2008. The growth in market share of 43% is much higher than any of the peers. BSLMF has grown in a declining market; increased market share and added new customers.
Over the past one year the Birla Sun Life Mutual Fund, one of the India’s top 5 mutual fund houses, has registered impressive growth across parameters viz. Average AUM, distributor base, or customer base. Since January 2008, the AAUM has grown 40%, distributor base has doubled to over 26,000 and number of branches to 109. It has also doubled its customer folio base to 21.5 lakh.
Anil Kumar, CEO, BSLMF and BSLAMC, said, “Birla Sun Life Mutual Fund has become the fastest growing fund house in India due to its strong heritage and track record of consistent performance across equity and debt asset classes. We are proud of having earned the unique distinction of being the only Mutual Fund house to have won the most coveted CNBC TV18 Crisil award for the second time in a row.”
Birla Sun Life Mutual Fund has bagged the most coveted and respected industry award - CNBC TV 18 Crisil – ‘Mutual Fund House of the Year’ award for the second successive year. Birla Sun Life Mutual Fund has created history in the Indian mutual fund industry by bagging this prestigious award twice in succession for the years 2007 and 2008, demonstrating its clear focus on fund performance and product innovation.
Additionally, for the year 2008, Birla Sun Life Mutual Fund also received Debt Fund House of year award. Three of the funds also won the best fund award in their respective categories – Birla Sun Life Income Fund, Birla Sun Life Short Term Fund – Retail, Birla Sun Life Gilt Plus – Regular plan.

Source: http://www.indiainfoline.com/news/innernews.asp?storyId=98151&lmn=1

SBI Mutual Fund targets Rs 12 crore in Orissa from GETS

The SBI Mutual Fund, the leading fund house of the country, expects to mobilise Rs 12 crore from Orissa for its newly launched SBI Gold Exchange Traded Scheme (GETS). It targets to mobilise about Rs 70 crore in the east and Rs 200 nationally from this scheme.

“ We hope to mobilise about Rs 12 crore in Orissa for the GETS and Rs 70 crore in the east”, Manoj Kumar Sinha, zonal head, SBI Fund Management Private Ltd. told Business Standard.
Sinha said, though the people were investing in gold physically, they were not investing through GETS, incurring additional costs in the process. The potential investors can diversify their investment and invest efficiently through this scheme. The new fund offer (NFO) for GETS will close on 28 April 2009. Launching of the GETS was significant as the company didn’t have this product in its product basket.
The minimum investment will be Rs 5000 and there is no upper limit. It will focus on the retail and the High Networth Individuals (HNIs) for mobilisation of the targeted funds. One month after the closing, the fund will be listed in the National Stock Exchange.
Orissa was one among the best performing regions of the company and net business during the last fiscal in the state was about Rs 400 crore. In terms of asset under management (AMU), SBI Mutual Fund enjoys a market share of 25 percent, he added.
Chittaranjan Panda, chief manager, Bhubaneswar said, the company intended to penetrate more areas in the state. Though it has network expansion plan, it is yet to be finalised. The company has 2 branches at Rourkela and Bhubaneswar and 6 districts are covered through business associates.

Source: http://www.business-standard.com/india/storypage.php?autono=354072

Fresh reforms for MF industry

The Securities and Exchange Board of India (Sebi) is finalising a second round of reforms for the mutual fund (MF) industry. The regulator is considering a slew of measures intended to protect investors’ interests and to ensure that fund houses have smoother and better regulated operations.

fixed maturities plans (FMPs) after last October’s liquidity crisis when funds faced heavy redemption.
It had earlier proposed that investors write a separate cheque for commissions paid to fund distributors in addition to the usual investment cheque in the name of the fund house.
Although distributors did not support this idea, Sebi favours the separate cheque system as distributors will get a commission based on the services they render.
At present, asset management companies (AMCs) pay the distributors directly with investors bearing an entry load. There is a disconnect in this system as distributors are directly paid by fund houses for services they are supposed to provide to investors. If approved, the proposal is expected to end up reducing the commission as investors would prefer to negotiate the same, depending on the services they receive.
Sources at Sebi point out that stock brokers were earlier charging huge commissions. It was only after competition increased that the rates automatically reduced, but the brokers have still survived.
The Association of Mutual Funds in India (Amfi), on its part, is working on an alternative arrangement and will soon submit three options to Sebi based on the experience overseas.
Last October’s liquidity crisis had also raised the issue of increasing networth requirements for AMCs from Rs 10 crore at present to Rs 50 crore. The idea was that, in case of huge losses, the high networth requirements would help a fund to survive its problems.
The argument against this was that some of the fund managers had floated mutual funds and high networth criteria may hinder such ventures. The view gaining currency now within the regulator is that assets under management of mutual funds floated by fund managers are not that big and, hence, increasing the networth requirement is important.
Also, last October’s crisis saw most of the redemption pressure coming from corporates. As a result, the regulator may ask funds to float separate schemes for corporates and non-corporate investors.
Sebi is also overhauling the seven-year-old risk management circular for mutual funds. The proposed amendments would focus on improving governance and risk management practices. Sebi is also insisting on separate portfolio and operation functions, proper empowerment for persons supervising risk management, ensuring that investments are carried out as per what is mentioned in offer documents and that investments follow established norms, among others.

Source: http://www.business-standard.com/india/news/fresh-reforms-for-mf-industry/353913/

AMFI suggests two-way load structure for MF products

The Association of Mutual Funds of India has suggested a two-way load structure for selling mutual fund products to investors comprising variable load and without any load.
Speaking on the sidelines of industry body Ficci's seminar here Association of Mutual Funds of India (AMFI) Chairman A P Kurian said the association has proposed what he called Plan A and Plan B.
Under Plan A, a variable load or commission could be charged depending upon the service or advice rendered by the distributor while under Plan B, there would be no load or commission charged to investors but the distributor would be compensated by the asset management company.
However, in that case, annual expenses charged to the schemes may need to be increased by 0.75 per cent, he said.
At present, investors need to pay a uniform commission of 2.5 per cent to distributors for mutual funds.
However, there is a view that the charges imposed on investors should be variable or linked to the extent of service rendered by the distributor.
The charges could be higher in case a distributor offers both service as well as advice, the quality of advice, etc., and charges could be less if the service rendered is minimum.

Source: http://economictimes.indiatimes.com/MF-News/AMFI-suggests-two-way-load-structure-for-MF-products/articleshow/4351351.cms

Sebi no to delaying different load structures for MFs

The mutual fund industry has been trying hard to convince Sebi to push back its
proposed decision to introduce variable load structures for mutual funds

India’s stock market regulator, the Securities and Exchange Board of India (Sebi), has rejected a plea by the asset management industry to delay the introduction of variable load structures on mutual funds that will enable investors to negotiate the commissions they pay distributors.

The regulator is keen to push a decision soon and may take the matter to its board shortly, a person close to the development told CNBC-TV18.The mutual fund industry has been trying hard to convince Sebi to push back its proposed decision to introduce variable load structures for mutual funds. Once approved, investors will have the right to negotiate the commission they pay a distributor every time they buy a mutual fund.Mutual fund houses are concerned that distributors may be reluctant to push their products if the rule comes into force.”We have suggestions both in favour of this and against it. Some strong views in favour of it and strong views against it,” M.S. Sahoo, a whole-time member of Sebi, told CNBC-TV18. “We have to take a call but there is nothing called the right time...,” Sahoo said. In 1992-93, similar opposition had greeted a decision that required brokers to disclose brokerage fees they charged, Sahoo said.But the Association of Mutual Funds of India (Amfi) is still trying hard. It has insisted on a so-called multiple class share model if the regulator implements the variable load structure right away.The multiple-class share model is popular in the US wherein investors have different payment options depending on the amount they are willing to pay upfront. This, Amfi says, will mark a paradigm shift in the pricing of services offered.“Variable load structure could be implemented right away provided it is a part of the shift,” Amfi chairman A.P. Kurian said. “We just want that it should not be implemented in an ad hoc manner.”

Source: http://www.livemint.com/2009/04/01222339/Sebi-no-to-delaying-different.html

Only 6 out of 38 AMCs making profit

Even as Mutual Funds manages assets worth billions of rupees, only a few of the mutual funds are making profits. Out of the 38 odd asset management companies (AMCs) or mutual funds (MFs), only about 5 or 6 are making profits, reports Economic Times.
This fact was pointed out by Vedprakash Chaturvedi, managing director of Tata Asset Management at FICCI seminar on capital markets. He also pointed out that there is a likelihood of consolidation taking place in the industry.
Nimesh Shah, managing director, ICICI Prudential Asset Management Company, said mutual funds make money by managing the assets. But if there is a 50% fall in assets under management, it impacts profits as the cost structures remain the same.
A P Kurian, chairman, Association of Mutual Funds of India, said the reason only a few mutual funds are making profits is that it is a volume game. With a fall in AUMs, the profits have gone down.

Source: http://www.myiris.com/newsCentre/newsPopup.php?fileR=20090403092219196&dir=2009/04/03&secID=livenews

Opportunities are going to be there in 2009-10 to make a lot of money?

Ramesh Damani, Member, BSE, asks market experts about their outlook for the year 2010.
Madhu Kela, Head-Equity, Reliance MF, Investors will have to be very alert and markets will have lot of volatility. He believes that opportunities are going to be there in 2009-10 to make a lot of money.
Kela is quite confident that the bottom has been made in India. “If we don’t have a catastrophe government which is being formed and the policy reversal in India, some one was telling me that Prakash karat becoming the Finance Minister of India, so that scenarios are different obviously but barring that we may have seen the worst.”
“This is the time which we believe is a bottom up investing time rather than making those big sector calls. I think these are terrific times to pick stocks with longer-term horizons”, Kela stated.
Nilesh Shah, Deputy MD, ICICI Prudential AMC, believes that markets are at a time where history can be shaped or maybe the future. “If all of us go and vote sensibly? - will the market have different index, the answer is maybe. This is an era where lot of events are going to happen and they are going to shape how the markets are going to behave.”
Narayan Ramachandran, MD, Morgan Stanley, does not expect markets to gallop to a new high a year from now. “I do not think equity market is the asset class of choice on a forward one year view even though it may have a positive return.”
ehangir Aziz, Chief Economist, JP Morgan, said there is enough in the economy, in terms of policies undertaken in early part of this year and last December onwards, to get us through a pretty decent economic turnaround in the second half of the year.
Abhay Laijawala, Head-Research, Deutsche Bank, said currently we have a Sensex target of 11,500 for next year. However, he was quick to add that this target could change depending on the contours and the shape that the next government takes.

Source: http://nseguide.com/press-releases/opportunities-are-going-to-be-there-in-2009-10-to-make-a-lot-of-money/

Mutual fund houses lost 36,798.58 crore in FY’09

The country’s mutual fund industry witnessed a nearly Rs 37,000 crore decline in its assets in the financial year 2008-09
The combined average assets under management (AUM) of the 35 fund houses in the country saw an erosion of Rs 36,798.58 crore, or 6.94 per cent, and dropped to Rs 4,93,286.56 crore at the end of March, according to the data released by the Association of Mutual Funds in India.The average AUM had been Rs 5,30,085.15 crore at the end of March in 2008.
Reliance Mutual Fund was the biggest loser and recorded losses to the tune of Rs 9,975 crore, accounting for nearly a third of the industry’s loss. However, it remained the top fund house in the country with an AUM of Rs 80,962.94 crore at the end of March this year.
Of the 35 fund houses, seven registered gains totaling Rs 36,499.73 crore.
Among the top five fund houses, HDFC MF and LIC MF registered a rise of Rs 13,183.28 crore and Rs 9,036.21 crore, respectively, while the other four - Reliance MF, ICICI Prudential, UTI MF and LIC MF - lost a combined over Rs 13,093 crore from their assets.
Fidelity MF, SBI MF and Taurus MF emerged as the other big losers during the financial year 2008-09.
The Bombay Stock Exchange benchmark Sensex has plunged 38 per cent year-on-year from 15,644.40 points in March 2008, to 9,700 levels in March 2009.Other fund houses which saw additions to their assets include Birla Sunlife MF, Canara Rebeco MF and Kotak Mahindra MF, with a rise of Rs 11,190.18 crore, Rs 1,858.81 crore and Rs 133.41 crore respectively in their AUMs.

Source: http://www.equitypandit.com/2009/04/mutual-fund-houses-lost-3679858-crore-in-fy09/