Religare MIP Plus Floats On

NFO Period from 12 April to 11 May 2010 

Religare Mutual Fund has launched a new fund named as Religare Monthly Income Plan (MIP) Plus, an open ended income scheme. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue is open for subscription from 12 April and closes on 11 May 2010. 

The investment objective of the scheme is to generate regular income through a portfolio of fixed income securities, Gold ETFs and equity & equity related instruments.

The scheme offers two options viz. growth and dividend option. 

The scheme will allocate 65% to 90% of assets in debt and money market instruments with low to medium risk profile. It would further allocate upto 25% of assets in equity and equity related instruments and/or units of equity mutual fund schemes with high risk profile. Investment in securitized debt including pass through certificate (PTC) shall not exceed 50% of the net assets of the scheme. The scheme will not invest in foreign securitized debt. 

The minimum application amount is Rs 5000 & in multiples of Re 1 thereafter for growth option and Rs 25000 & in multiples of Re 1 thereafter for dividend option. 

The fund seeks to collect a minimum subscription (minimum target) amount of Rs 1 crore under the scheme during the NFO period. 

Entry load charge will be nil for the scheme. In respect of each purchase/switch-in of units, an exit load of 1% is payable if units are redeemed/switched-out on or before 1 year from the date of allotment. In respect of each purchase/switch-in of units, no exit load is payable if units are redeemed/ switched out after 1 year from the date of allotment.

The scheme will benchmark 65% against CRISIL MIP Blended Fund Index and 35% against price of gold. 

Mr. Ashish Nigam (for debt and gold ETFs investments) and Mr. Vetri Subramaniam (for equity investments) are the fund managers of the scheme.

IDFC MF Launches Nifty Fund

NFO Period from 12 April to 23 April 2010 

IDFC Mutual Fund has launched a new fund named as IDFC Nifty Fund, an open ended index linked equity scheme. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue is open for subscription from 12 April and closes on 23 April 2010. 

The investment objective of the scheme is to replicate the S&P CNX Nifty index by investing in securities of the S&P CNX Nifty Index in the same proportion/weightage. 

The scheme offers two options viz. growth and dividend option. 

The scheme will allocate 90% to 100% of assets in securities (including derivatives) forming a part of the S&P CNX Nifty Index with high risk profile. It would further allocate upto 10% of assets in debt & money market instruments with low to medium risk profile. 

The minimum application amount is Rs 500 and in multiples of Re 1 thereafter. 

The fund seeks to collect a minimum subscription (minimum target) amount of Rs 1 crore under the scheme during the NFO period. 

Entry load and exit load charge will be nil for the scheme. 

Benchmark Index for the scheme is S&P CNX Nifty Index. 

The scheme will be managed by Mr. Tridib Pathak.

Total assets of MF register highest monthly fall since April 04

Income funds and other ETFs pull the asset base down in March 10 

The mutual fund (MF) industry registered the highest monthly fall of 19.94% since April 04 in total asset under management (AUM) to Rs 6.14 lakh crore ending March 2010 from Rs 7.67lakh crore in February 2010. The culprit behind the drastic fall in AUM was the fall in assets of income funds. Almost all the fund categories except for Income funds, other ETFs and fund of funds investing overseas witnessed increase in total assets. 

The Average Assets Under Management (AAUM) of mutual fund industry plunged 4.37% in March 2010 after witnessing 2.64% rise in February 2010. The fall was largely due to the corporate withdrawing money to meet their advance tax payment commitments and partly to balance their accounts book for the financial year. Moreover, huge dividend payouts by fund houses and banks withdrawal of money from debt fund category have added for the decline of the industry's assets. Fund houses had announced dividend for the equity portfolio out of the gains arisen from the investment in stock market. The industry's assets depleted almost by Rs 34186.94 crore in March. This is the third time that the industry's assets have tumbled down after touching a record high of Rs 8 lakh crore during November 2009. In December 2009, the industry's assets declined by 1.62% while in January 2010 the assets fell by 4.14%.

Association of Mutual Funds in India (AMFI) has released monthly data of the industry for February 2010. The industry has launched 75 new schemes in February, out of which 72 schemes belong to income fund, one under equity funds and one under gold ETFs and other ETFs category. The new funds launched mobilized around Rs 14985 crore during the month under review.

While, out of 9 categories, 6 witnessed rise in AUM, while income funds, other ETFs and fund of funds investing overseas, recorded a fall. Income funds witnessed strong depletion in assets by 34.57%, followed by other ETFs at -28.69% and fund of funds investing overseas by -0.69%. 

The Income funds which registered the highest growth of 30.58% in January 2010 reported marginal growth of 1.21% during the month of February 2010 and highest fall in March 2010.

The MF industry recorded the net outflow of Rs 162165 crore in March 2010 against the inflow of Rs 6365 crore in February 2010.

Equity Funds

 

The total asset of equity funds has increased marginally by 3.19% to 1.74 lakh crore as on March 2010 from 1.69 lakh crore as on February 2010, as both the key market indices, BSE Sensex and S&P CNX Nifty ended up with gains of 6.68% and 6.64% respectively in March 2010, compared to marginal gains of 0.44% and 0.82% respectively in February 2010. 

The rise in asset base increased the weightage of equity funds to 28% in the total assets of the industry as on March 2010 from 22% in February. However, the equity funds witnessed a net outflow of Rs 2016 crore and total redemption of Rs 8236 crore in the month of March 2010. 

Income Funds

The Income funds that stood in limelight with highest inflow of Rs 1.06 lakh crore in January 2010 witnessed only an inflow of Rs 4887 crore in February but highest net outflow of Rs 1.64 lakh crore during the month with the redemption remaining quite heavy at Rs 4.81 lakh crore. 

Moreover, the total asset of income fund decreased by whooping 34.57% to Rs 3.12 lakh crore compared to a marginal rise of 1.21% to 4.76 lakh crore in February 2010. Also, the income funds AUM weightage declined to 51% as that of the previous month at 62%.

Liquid Funds

Liquid funds recorded highest net inflow at Rs 3971 crore in March 2010, after witnessing outflow as against outflow for the three consecutive months. Liquid funds also witnessed highest redemption of Rs 6.36 lakh crore as against redemptions of Rs 4.93 lakh crore in February 2010. The total asset increased by 6.93% to Rs 78094 crore in March 2010 compared to 2.14% fall in February 2010. 

Gilt Funds

The AUM of gilt funds witnessed the highest rise of 7.06% Rs 3395 crore in March 2010 from Rs 3171 crore in February 2010. Gilt funds had net inflow of Rs 267 crore and redemption of Rs 410 crore for the month under review. The yields on 10-year Government Stock, 6.35% GS 2020, eased one basis point to close at 7.85% during March 2010 compared to 27 bps jump in February 2010. The yield hit 17 months high of 8.01% in mid-March 2010, as the investors were worried about the inflation potentials of the budget proposals, monetary tightening, borrowing program of Rs 4.57 trillion for FY 2010-11 and replacement of existing 10-year paper with new paper in FY 2010-11. This restricted the inflows in the gilt funds.

The yields eased in the second half of March 2010, as liquidity remained above expectations despite advance tax cash outflows and CRR hike taking full effect. The revision in outlook on India from negative to stable by S&P gave a boost to the sentiments. Further, lower than expected supply of paper planned for April-September 2010 and year end demand for government securities from banks and financial institutions helped the yields to ease to seven weeks low of 7.76%.

Other Funds

ELSS-Equity Funds witnessed net inflow of Rs 371 crore registering 6.19% rise in its total assets. Gold ETFs registered net inflow of Rs 45 crore and its total AUM recorded the growth of 0.44% to Rs 1590 crore during the month under review. The total AUM of other ETFs declined, by robust 28.69% in March 2010. Also, the Fund of Funds recorded fall in their asset base at 0.69% rise in March 2010. However, balanced funds continuing the trend, witnessed a rise in their asset base at 0.61%. 

Mutual Funds net selling of equities accelerated to Rs 3806.90 crore in March 2010 as against net selling of Rs 697.20 crore in February 2010. Of the 20 trading sessions in March, mutual funds were net sellers in 17 sessions and net buyers in the remaining 3 sessions. Mutual Funds were net sellers of debt papers worth Rs 3860.9 crore in March 2010 as against net buying of Rs 11973.70 crore in February 2010. MFs were buying of debt securities in 13 out of 19 trading sessions. There was heavy selling in debt papers in the second half of the month.

Crude shoots up

Crude continues its upward journey on demand hopes 

Crude oil prices ended substantially higher on Monday, 05 April 2010. Prices rose on anticipation of higher demand in coming months, which arose following positive economic reports since the past couple of days at Wall Street. 

On Monday, crude-oil futures for light sweet crude for May delivery closed at $86.62/barrel (higher by $1.75 or 2%). During intra day trading, it surpassed the $87 mark. For the month of March, crude rose 5.1%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 8.8%. 

Prices are still very much lower as compared to 3 July, 2008 settlement of $145.29 a barrel and an intraday high of $147.27 on 11 July, 2008, an all-time high. But oil has also gained nearly 156% from a December, 2008 nadir. That day prices settled at $33.87 a barrel following an intraday low of $32.40. 

In the currency market on Monday, the dollar index, which measures the strength of the dollar against basket of six other currencies slipped by 0.2%. The dollar index gained about 0.7% in March and rallied 4% during the first quarter. 

Among economic reports scheduled on Monday, The National Association of Realtors in US reported on Monday, 05 April 2010 that there was a seasonally adjusted 8.2% increase in its pending home sales index in February. The NAR's index tracks sales contracts on existing homes, and is seen to be a good indicator of actual sales, which are recorded a month or two later at closing. 

Among other economic data, The Institute for Supply Management in US reported on Monday, 05 April 2010 that the ISM non-manufacturing index rose to 55.4% from 53.0% in February. The gain was stronger than expected. Market was expecting the index to rise to 54%. The report indicated that activity in the service sector of the U.S. economy improved markedly in March, indicating that the recovery is broadening out. 

The Labor Department in US reported on Friday, 02 April 2010 that the U.S. economy created 162,000 jobs in March 2010. It was the largest seasonally adjusted increase in nonfarm payrolls in three years. The unemployment rate was steady at 9.7%. The report detailed that nonfarm payrolls rose for just the third time in the past 27 months. 

Elsewhere, natural gas futures advanced for a second day in New York on speculation demand for the industrial fuel will strengthen as the economic recovery gains momentum. Natural gas for May delivery gained 19.1 cents (4.7%) to settle at $4.277 per million British thermal units on the New York Mercantile Exchange. Prices have dropped 23% this year.

Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex. 

At the MCX, crude oil for April delivery closed higher by Rs 13(0.33%) at Rs 3,843/barrel. Natural gas for April delivery closed at Rs 191/mmbtu, higher by Rs 5 (2.7%).

Precious metals add more glaze

Precious metals continue to stay bright on the second day of second quarter 

Precious metal prices ended higher on Monday, 05 April 2010. Prices rose as the dollar weakened. Prices also rose along with crude prices on anticipation of higher demand in coming months, which arose following better than expected economic reports. 

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa. 

On Monday, gold for June delivery ended at $1,133.8 an ounce, higher by $7.7 (0.7%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 1.8%. In FY 2010, gold touched a high of $1,154 in January. For the month of March, gold slid 0.4%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 3.4%. 

On Monday, May Comex silver futures ended higher by 23 cents (1.3%) at $18.11 an ounce. For the month of March, silver ended higher by 5%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.4%. 

In the currency market on Monday, the dollar index, which measures the strength of the dollar against basket of six other currencies slipped by 0.2%. The dollar index gained about 0.7% in March and rallied 4% during the first quarter. 

Among economic reports scheduled on Monday, The National Association of Realtors in US reported on Monday, 05 April 2010 that there was a seasonally adjusted 8.2% increase in its pending home sales index in February. The NAR's index tracks sales contracts on existing homes, and is seen to be a good indicator of actual sales, which are recorded a month or two later at closing. 

Among other economic data, The Institute for Supply Management in US reported on Monday, 05 April 2010 that the ISM non-manufacturing index rose to 55.4% from 53.0% in February. The gain was stronger than expected. Market was expecting the index to rise to 54%. The report indicated that activity in the service sector of the U.S. economy improved markedly in March, indicating that the recovery is broadening out. 

Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year. 

Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end. Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level. 

At the MCX, gold prices for June delivery closed lower by Rs 57 (0.34%) at Rs 16,502 per ten grams. Prices rose to a high of Rs 16,572 per 10 grams and fell to a low of Rs 16,437 per 10 grams during the day's trading. 

At the MCX, silver prices for May delivery closed Rs 4 (0.01%) lower at Rs 27,417/Kg. Prices opened at Rs 27,450/kg and fell to a low of Rs 27,216/Kg during the day's trading.