Mutual Fund Industry Update May 2009

May 2009

Revised Portfolio Format for Debt Oriented Closed Ended Schemes and Interval Schemes

As per SEBI, AMCs are required to disclose the portfolio of debt oriented close-ended schemes and interval schemes on a monthly basis on their respective websites. The objective is to enhance the transparency of portfolio of such schemes for the investors
The said disclosure of the portfolio as on the last day of the month shall be made on or before 3rd working day of succeeding month. For example, portfolio as of May 31, 2009 shall be disclosed by June 03, 2009.

Smart Asset Allocation by the Fund Managers of International Equity Funds

The Indian markets have rallied in past 3 months (33%), so as the Global markets but the growth rate of Indian markets is seen to be higher than the global markets. This market rally led to the increasing performance of diversified equity funds but these funds were not able to beat their benchmarks
On the other side, few Fund Managers of International Equity Funds smartly shuffled their asset allocation by investing over 70 per cent of their portfolio in Indian equities. This resulted in high returns in international funds mainly contributed by the Indian markets.
Templeton India Equity Income and Fidelity International Opportunities Fund were among the top performing funds for the period, generating 39.6% and 33.8% returns respectively over performing BSE Sensex that has returned 33% for the same period.

More than Rs 10,000 crore is going to come into the hands of investors in the next two months, which is currently locked up in the FMPs. Also, Rs 16,492 crore worth of FMPs had already matured in April alone. Good percentage of this money is expected to move in equities in year 2009 considering the recent market rally
FMPs and Debt Funds were the most sold flavors in years 2008 considering stock market fall. On the contrary, equity asset class may see more buyers in the market in year 2009. The equity market has returned 15% in April 2009 alone that builds confidence in the investors to invest in equity asset class

As per industry sources, banks have parked huge institutional funds into the fixed income schemes of MFs. This has resulted in increase of 10.52% in the AUM of the Indian mutual fund industry April 09 that stands at Rs 5,51,300 cr
According to the data released by RBI, banks have an investment of over Rs 85,000 cr in MFs as on April 10, 2009 as against Rs 50,950 cr last year. Increasing institutional inflow in the market is assumed to bring stability in the highly volatile stock market movements.
Out of the 35 existing Asset Management Companies, 31 AMCs have seen increase in their AUM. Reliance continues to be the market leader with AUM of Rs 88,388 cr (approx) followed by HDFC and ICICI Prudential AMC

Despite of being the best performing category in last 6 months and 1 year duration, Gold ETFs have become the worst performer in last 1 month and 3 months period. The upward movement of equity markets is seen as the reason for such fall because the investors are booking profits in Gold ETFs and investing them in equity asset class
This has resulted in declining number of units of Gold ETFs traded on National Stock Exchange in Feb 09 Apr 09. The total traded quantity of Benchmarks gold ETF, Gold BeES declined from 6 89,344 units in February to 479,331 units in March and to 3,04,007 units in April

Banking and Financial Services, Oil and Gas, Engineering, Pharmaceutical and IT sector are the top 5 sectors where approx 55.7% of total net assets of the various fund houses are invested
The Fund manager has taken minimum exposure in Services, Real Estate and Consumer Durable sector this quarter
Reliance, HDFC and UTI have taken the maximum exposure in Banking & Financial Services totalling to approx Rs 6,416 cr and top 3 contributors to the oil&gas sector are Reliance, SBI and UTI totaling Rs 4,521 cr

If you liked this article, you might also want to read:

Comments

Thanks for your comment