1.Foreigners allowed to invest directly in equities.
The Government has announced a new scheme under which a foreign individual, a foreign pension fund or even a foreign trust will be able to invest directly in the Indian equity market. These investors will be called 'Qualified Foreign Investors' (QFIs). The new scheme is expected to be operationalised from January 15. "This has been done in order to widen the class of investors, attract more foreign funds, reduce market volatility and deepen the Indian capital market," a Finance Ministry statement said.
The investors are already allowed direct access to Indian mutual fund schemes. The latest decision is the next logical step in the direction, the statement added. At present, foreign institutional investors (FIIs) or foreigners, through sub-accounts with registered FIIs, can invest in the equity market. Unregistered foreign individuals and institutions invest through participatory notes (PNs). Now, this trend will change.
News Source – BUSINESS LINE.
2.Gold funds beat bonds, stocks in returns trip.
Mutual funds that invest in gold have squarely beaten the more popular equity and bond funds in terms of returns. While equity funds continued to pine away under weak market conditions and bond funds were caught in a flux amid changes in interest rates, gold funds ended the year generating more than 30% returns for investors. Gold funds, which include exchange traded funds (ETFs) and gold fund-of-funds (FoFs), embellish the otherwise dismal report cards of most fund houses – both in terms of returns and growth in asset base. In the past one year, most gold funds have gained 27-31%, according to data from Value Research.
News Source – ECONOMIC TIMES.
3.Fund houses to offer SIP units in demat from January 2012.
Fund houses will allow investors to hold their SIP units in dematerialized form from January, 2012. SEBI through its circular issued on May 19, 2011 had asked fund houses to allow investors to receive allotment of units in demat account from October 2011. The regulator had observed that AMCs were offering investors to hold units in either physical or demat in close-ended schemes. However, no such option was allowed in open-ended schemes. Fund houses have already started issuing addendums to this effect.
News Source – CAFE MUTUAL.
The current volatility in the stock market may nudge investors to pull out their investments . But past trends show that long-term equity play has not disappointed investors. So it may not be a bad idea to put up a brave front and hold on for a little longer, feel fund managers. Equity market investors would be more than happy to put behind memories of 2011, which saw many of them booking big losses as major indices lost more than 20% of their value during the year. Also, sharing this sympathy is the group of investors who chose to invest in the equity market through mutual funds, albeit for a shorter time frame.
News Source – ECONOMIC TIMES.
NEW FUND LAUNCH
5.Tata Fixed Maturity Plan Series 38 Scheme G (95 Days) Floats On.
Tata Mutual Fund has launched a new fund named as Tata Fixed Maturity Plan Series 38 Scheme G, a close-ended debt scheme with the duration of 95 days from the date of allotment. The New Fund Offer (NFO) price for the scheme is Rs. 10 per unit. The new issue will be open for subscription from 2 January and closes on 4 January 2012.
News Source – NAV INDIA.
Market regulator SEBI has appointed CDSL Ventures Ltd. (CVL) as the KYC Registration Agency (KRA), said two sources familiar with the development. CVL already possesses the database of all KYC compliant mutual fund investors. SEBI had streamlined the KYC process by putting in place guidelines for common KYC agencies through its circular issued on December 23, 2011.
"The KRA system shall be applicable for all new client accounts opened from January 1, 2012. Only for the client accounts opened between Jan 1 and Jan 31, 2012, the intermediaries may upload the KYC data on the KRA system and send the relevant KYC documents to KRA, by February 15, 2012," states the circular. SEBI has permitted wholly-owned subsidiaries of stock exchanges, depository and SROs registered with SEBI as eligible entities to become KYC Registration Agency (KRA) for a period of five years. The KRA has to have a net worth of Rs. 25 crore.
With a view to bring uniformity in KYC process, SEBI has introduced a common Know your Customer (KYC) application for all the SEBI registered intermediaries viz. Mutual Funds, Portfolio Managers, Depository Participants, Stock Brokers, Venture Capital Funds, Collective Investment Schemes etc. All the new investors are therefore requested to use the Common KYC application form to apply for KYC and mandatorily undergo In Person Verification (IPV) requirements with SEBI registered intermediaries including Mutual Funds.
News Source – INDIA INFOLINE.
8.UTI MF revises exit load structure under Bond Fund.
UTI Mutual Fund has decided to revise the exit load structure under UTI Bond Fund with effect from January 2, 2012. Accordingly, the charges will be, if exited on or before 180 days, the exit load charge is 1.50%; if exited after 180 days and on or before 365 days, the exit load charge is 1.25%; if exited after 365 days and on or before 456 days, the exit load charge is 1%; if exited after 456 days, the exit load charge is nil.
News Source – LIVE MINT.
9.Edelweiss Mutual Fund announces change in scheme name.
Edelweiss Mutual Fund has announced change in the name of Edelweiss Nifty Enhancer Fund, an Open-ended Equity Scheme of the Fund with effect from 1 January 2012. Accordingly the revised name of the scheme will be Edelweiss Equity Enhancer Fund.
The primary objective of the Fund is to generate capital appreciation and income distribution by investing in a portfolio that endeavours to outperform the S & P CNX Nifty Index "Edelweiss Nifty Enhancer Fund" is only the name of the Fund. The scheme is not an Index Fund. The equity stocks / weightages of the equity stocks in the scheme Portfolio may differ vis-a-vis the underlying stocks of Nifty Index.
News Source – INDIA INFOLINE.