Introduction of Flexible Investment Plans in Equity Mutual Fund Schemes

• Birla Sun Life Mutual Fund has introduced the Discipline Advantage Plan under Birla Sun Life Income Plus and Birla Sun Life Income Fund. Under this plan, an investor will have the facility to systematically transfer his investments from these schemes to any of the eligible equity schemes. This plan comes with no entry load and is effective from 4th Mar 2009.
• HDFC Mutual Fund has introduced a FlexIndex Plan where the money can be switched from the liquid schemes to the eligible equity schemes if the four trigger events based on the sensex level as decided by the investor are met.

Infosys once again Participates in Mutual Fund Investment

• Infosys, the country’s 2nd largest exporter has decided to reinvest in mutual fund schemes after approx one and a half years.
• This is a big boost for the industry as the company has invested Rs 160 cr in liquid schemes with four mutual fund houses. It is expected to park approx. Rs 1,200 cr more in the coming quarter in liquid schemes.

SEBI proposes Variable Load Structure for Mutual Funds

• SEBI has proposed a variable load structure for mutual fund schemes wherein the investor and the distributor can mutually decide upon the load to be paid for the scheme. The market regulator has invited public comments with regards to variable load structure.
• This proposal is opposed across the distributor community because of various reasons such as:
  • Increased revenue pressures when recession has already impacted their income.
  • Multiple no-load or low-load options will lead to lack of interest on the part of advisors to recommend good schemes to investors

Increase in Mutual Fund Asset Under Management (AUM) in February 2009

• The AUM of the Indian mutual fund industry has increased by 7.9% in Feb 09 reversing the earlier trend of declining AUM in last 6 months.
• This AUM increase is mainly due to large inflows in Liquid Funds. The main recipients were Birla, ICICI, HDFC and Reliance mutual fund; their combined AUM has increased by Rs 23,301 cr in Feb 09.
• Fresh investment is expected to boost this AUM further in the coming quarter mainly contributed by Debt Schemes

Morningstar awarded 5 Star Rating to Sundaram BNP Paribas Tax Saver

• Morningstar India has announced its awards for 2008. Sundaram BNP Paribas Tax Saver is awarded the Morningstar Fund Award (India) within Equity-Linked Savings Scheme (ELSS) category for the one and three-year period.
• This fund has received 5 Star Rating, generating -47.6% and 5.2% returns when the ELSS category registered -55.2% and 4.3% returns respectively.

Sectoral Picks of Fund Managers – February 2009