1.Banking Funds outperformed in Jan 2012.
Funds focusing on the banking and financial services sector topped the charts in January, registering average returns of 23.74%, about in line with banking index's performance. Reserve Bank of India's decision to cut the cash reserve ratio (CRR) for banks by 50 basis points on January 24 boosted the banking sector and raised hopes that the central bank might soon start to cut its key policy rate.
The CRR is the proportion of deposits that banks must keep at the central bank. Stronger-than-expected results from private sector lenders including HDFC Bank and Axis Bank also supported sentiment. The UTI Banking Sector Fund was India's best performing fund in January, with a return of 26.2%, followed by the Goldman Sachs PSU Bank Exchange Traded Scheme, which returned 25.7%.
News Source – MONEY CONTROL.
Equity funds continued with uptrend owing to positive market outlook. The brooder indices Large cap and Small & Mid cap were up by over 1 % which resulted the funds in the respective category to end with positive returns. Among others, Diversified Equity, ELSS and Balanced ended in green witnessing no losers in any category.
News Source – MONEY CONTROL.
Mutual funds have been a key source of funding for non-banking finance companies (NBFCs) of late. Funds have raised exposure to short-term securities issued by NBFCs to 14% of their total debt assets under management as on December 31 from 9.3% as on June 30 last year.
News Source – ECONOMIC TIMES.
4.Life cycle products will make asset allocation easy for retail, say experts.
Recently, SEBI's International Advisory Board (IAB) had suggested the introduction of more life-cycle products alongside plain, vanilla products. As SEBI set the ball rolling, industry experts expect the innovative life-cycle products to bring in active retail participation. "They (life-cycle products) serve as tailor-made products which retail customers can use for asset allocation," reveals Srinivasan Jain, CMO, SBI Mutual Fund.
Asset allocation is a key step towards investment and life-style products will make life easy for new investors. "Such products are positive for the industry, though they might take a while to penetrate the market. Mutual funds are always linked to future goals hence these products will help retail customers do asset allocation with ease," says Ajit Menon, EVP – Head of Sales & Marketing, DSP BlackRock. A top official from UTI Mutual Fund feels, "While asset allocation will be easy for retail clients with lifecycle products, they will shift the advisor's responsibility to the fund manager."
News Source – CAFE MUTUAL.
NEW FUND LAUNCH
5.Pramerica Short Term Floating Rate Fund.
Pramerica Mutual Fund launched Pramerica Short Term Floating Rate Fund, an open ended income scheme. The new issue is open for subscription from 7th February and closes on 9th February 2012.
News Source – AMFI.