Earlier, distributors were assured of at least 2.25 per cent fees when retail investors bought any equity scheme. For instance, if a cheque of Rs 100 was given to the distributor, Rs 97.75 was invested and the rest Rs 2.25 went to the distributor as commission. Sebi's no entry load decision means distributors are no longer assured of a particular amount of commission because fund houses cannot make it mandatory for the investor to pay the same.
Exchanges will have to facilitate a more direct interface between clients and the clearing corporation, bypassing intermediaries such as brokers, under this new proposed framework.
What are the points to consider when you evaluate a prospectus? Apart from looking at the fund's track record, latest performance and the credit worthiness of the fund managers, you need to look into the fund expenses as well.
The one-year returns for equity-oriented mutual fund (MFs) schemes have largely mirrored the gains made in the secondary market. However, schemes that invest in infrastructure (infra), small-cap, and public sector undertaking (PSU) banks have emerged standout performers, with gains in excess of 100 per cent in some cases. Of the total 484 equity schemes, 353 have managed to beat the Sensex, reveals the data provided by Value Research. Around 20 have delivered returns in excess of 90 per cent and six schemes have given returns of over 100 per cent in the past one year. The S&P BSE Sensex Total Return Index (TRI) has given returns of 51 per cent in the last one year, ended October 29.
'MFs acted as reckless lenders and not as prudent investors.' 'Clearly, how debt funds are being run is a systemic issue,' warns Debashis Basu.
The primary issue market has hit an all-time high with 63 corporates raising Rs 1,18,704 crore through main-board initial public offerings (IPOs) so far in 2021, which is nearly 4.5 times more than the Rs 26,613 crore raised through 15 issues in 2020 and almost double of the previous best of Rs 68,827 crore in 2017, according to a report. Pranav Haldea, managing director of Prime Database Group, said the IPO frenzy was driven by new-age loss-making technology start-ups along with strong retail participation, and the resultant massive listing gains were the key highlights of the year. Another highlight was only 51 per cent or Rs 103,621 crore of the total Rs 202,009 crore was fresh capital raising and the remaining Rs 98,388 crore were offers for sale.
The Reserve Bank of India and the Securities and Exchange Board of India are considering a proposal for allowing Indian mutual funds to invest up to $1 billion in world's biggest companies through equity indices like Dow Jones Global Titans Index.
January 2005 was clearly a testing month for most investors; however, such times can often demarcate serious long-term investors from those who are looking to make a quick buck.
Total MF investments in debt papers like certificate of deposits, commercial papers and collaterised borrowing and lending obligations stood at around Rs 184,000 crore at the end of February. Industry experts said that by March-end, this corpus had depleted by over 50 per cent. "The industry would have lost around Rs 1 lakh crore as banks and institutions redeemed their investments during the last week of March," said Jaideep Bhattacharya of UTI Asset Management Company.
Now that the stock markets are in a treacherous arena these pointers will help you keep your head above the water.
Some fund houses have modified the terms of their schemes. How does it impact you?
'Sebi has to make sure that investor interests are protected and at the same time, there isn't over-regulation so that companies don't get discouraged to list here.'
Financial planning expert Vicky Mehta offers some valuable tips on mutual funds.
The Unit Trust of India Asset Management Company on Saturday called for a lower tax regime for mutual fund industry for the benefit of average investors.
Financial planning expert Vetapalem Sridhar gives tips on how to build a good mutual fund portfolio for the long-term.
Financial planning expert Irfan Rupani offers some valuable tips.
Under the new guidelines, the top 10 active equity schemes in terms of assets would collectively require investments of around Rs 365 crore -- up from mandated Rs 50 lakh at present -- in their own schemes.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
Financial planning expert Irfan Rupani replies to readers' queries on mutual funds.
G-secs offer good liquidity, high safety. If the interest rate dips, as is widely expected, these could give you higher gains.
The move comes less than two months after the Union Budget clarified that returns from pass through certificates were tax-exempt.
The net outflow in February was, however, the lowest in eight months following a huge outflow of Rs 5,212 crore (Rs 52.12 billion) in January 2013, according to an analysis of latest data available with market regulator Sebi.
Equity investments are fruitful over the very long 20-year term.
The number of fund houses are increasing each year in the fast growing Indian economy but when it comes about the size, the top five players control over half of the country's mutual fund business.
U K Sinha, new Sebi chairman had, in an interaction with its MF division, made his view clear on the need for some moves to spur overall development for the sector, persons familiar with the development said.
Fund managers say the recent fall is not going to sustain.
Sudhanshu Singh, director IBBM, MM Securities, answers your mutual fund queries.
But increase in surcharge for DDT to impact debt funds.
ETFs are like stocks as they trade on the stock exchan#8805 but they are shares of a portfolio, not of a company.
Mid cap stocks (and subsequently mid cap funds) have been the worst hit in the recent stock market crash. Investors who added mid cap investments to their portfolios without understanding their true nature are a dismayed lot. Typically, mid caps are presented as an opportunity to make quick money; sadly, investors are rarely made aware of the higher risk involved. While there is no doubt that if identified correctly, mid caps can contribute significantly.
The Reserve Bank of India on Thursday raised the overall limit for overseas investment by domestic mutual funds from $5 billion to $7 billion. Industry estimates peg the amount invested overseas at $1 bn to $2 billion. Only last September, RBI had raised the overseas investment limit for mutual funds from $4 bn to $5 bn. RBI said the overall ceiling for investment in overseas exchange-traded funds will continue to be at $1 bn. There are about 17 schemes that invest overseas.
Now SEBI registered Mutual Funds would be allowed to accept subscriptions from foreign investors who meet the Know Your Client (KYC) requirements for equity schemes.
According to an analysis by Value Research, the 'diversified equity' schemes that are most popular among investors lost an average of 28.3% in the past three months period. Although there were losses in the January-March period, there were huge positive returns in the previous three quarters. Funds in the diversified equity category gained an average of 21.4% over the four quarters in FY 2007-08, with individual schemes returns ranging from a gain of 53.7% to a loss of 7.9%.
MFs are planning schemes that will give fund managers the leeway to adopt strategies in line with the market conditions. Fund houses want to ensure they are not restricted by the fund's investment mandate about having to invest in certain sectors even in case of change in sentiment. According to the offer document, if the fund manager expects the markets to head downwards, the scheme can hedge exposure to equity either fully or partially by initiating short futures positions.
