Tag: mutual funds

Bajaj Finserv Mutual Fund launches Nifty 1D Rate Liquid ETF: Should you invest

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bajaj Finserv Mutual Fund on Monday (May 13) launched Nifty 1D Rate Liquid ETF. The New Fund Offer (NFO) period for this ETF is from May 13 to May 16 2024.

This is an open-ended exchange traded fund tracking Nifty 1D Rate Index with relatively low interest rate risk and relatively low credit risk.

The scheme aims to provide current income with low risk while ensuring a high level of liquidity. It will primarily invest in tri-party repo on government securities or T-bills/Repo and Reverse Repo, closely mirroring the returns of Nifty 1D Rate index, subject to tracking error.

Targeted towards investors seeking short-term savings solutions, the ETF will offer a liquid scheme with low risk and high liquidity. The initial investment can start at ₹5,000, with subsequent investments allowed in multiples of ₹1.

The ETF will be managed by Siddharth Chaudhary and Nimesh Chandan. There will be no exit load for units sold through the secondary market on the stock exchange.

However, investors should note that brokerage on sales of units on stock exchanges shall be borne by them.

Large investors can redeem units directly with the fund at applicable NAV based prices if the redemption amount is greater than ₹25 crore, without any exit load currently applicable.

Investment consideration

The Nifty 1D Rate Liquid ETF presents a decent option for investors seeking stability and liquidity in their investment portfolio, especially for short-term savings.

With its focus on low-risk securities covered by Nifty 1D Rate Index, the ETF offers a potential avenue for current income with relatively low interest rate and credit risk.

However, as with any investment decision, investors should conduct thorough due diligence and consider consulting with financial advisors to assess whether this ETF aligns with their investment objectives and risk appetite.

ALSO READ | India’s first multi-asset allocation mutual fund with dividend yield strategy launched: Is it worth your investment?

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s first multi-asset allocation mutual fund with dividend yield strategy launched: Is it worth your investment?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bajaj Finserv Asset Management Company (Bajaj Finserv AMC) on Monday (May 13) launched Bajaj Finserv Multi Asset Allocation Fund. This scheme is the nation’s first multi-asset fund with a dividend yield strategy.

The new fund offer (NFO) for the scheme will remain open until May 27.

Following this, it will be available for subscription until or before June 6, 2024.

The mutual fund house noted that dividend is due only when declared and there is no assurance that a company may continue paying dividend in future.

The scheme is vulnerable to instances where investments in securities may not earn dividend or where lesser dividend is declared by a company in subsequent years in which investments are made by scheme, Bajaj Finserv Mutual Fund said.

This is because profitability of companies are likely to vary and have a material bearing on their ability to declare

About the fund

The Bajaj Finserv Multi Asset Allocation Fund offers a diversified portfolio across various asset classes, including equities, fixed income instruments, commodities such as gold and silver ETFs, and REITs/InvITs.

With an equity allocation ranging from 35-80%, the fund employs a multi-theme, multi-sector, and multi-cap approach to investment.

The fund’s benchmark comprises 65% Nifty 50 TRI, 25% NIFTY Short Duration Debt Index, and 10% domestic prices of gold.

The Bajaj Finserv Multi Asset Allocation Fund will be managed jointly by Nimesh Chandan, Sorbh Gupta, Siddharth Chaudhary, and Vinay Bafna, across equity, fixed income, and commodities investment segments.

Investment considerations

According to Ganesh Mohan, CEO of Bajaj Finserv AMC, this fund has the ability to provide investors with access to multiple asset classes through a single investment avenue.

He stated, “Our aim is to offer a well-rounded portfolio that can navigate through various market scenarios and deliver consistent returns.”

Nimesh Chandan, CIO of Bajaj Finserv AMC further highlighted the focus on dividend yield-based investing to minimise volatility impact and maximise returns.

Chandan stated, “Investors seeking reasonable returns, professional asset allocation, and an all-weather investment avenue with low volatility compared to pure equity funds can consider Bajaj Finserv Multi Asset Allocation Fund.”

While the fund provides a unique investment proposition, investors should note that dividends are subject to declaration by companies, and there is no guarantee of future payouts.

Additionally, entry load is not applicable, but an exit load will be levied for redemptions/switch-outs within one year from the date of allotment.

Moreover, investors should conduct a thorough assessment of their risk tolerance, investment horizon, and retirement goals before investing.

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Bajaj Finserv to launch India’s first multi-asset fund with dividend yield strategy

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bajaj Finserv Asset Management Company (Bajaj Finserv AMC) has announced the launch of Bajaj Finserv Multi Asset Allocation Fund. This will be India’s first multi-asset fund with dividend yield strategy, the mutual fund house said.

The new fund offer (NFO) of the scheme will open on May 13 and close on May 27. After that, it will be open for subscription on an ongoing basis on or before June 6, 2024.

The benchmark of the fund will be 65% Nifty 50 TRI plus 25% NIFTY Short Duration Debt Index plus 10% domestic prices of gold.

Bajaj Finserv Multi Asset Allocation Fund will invest across different asset classes with varying allocations.

It will maintain a diversified portfolio with an equity allocation ranging from 35-80%, employing a dividend yield strategy, multi-theme and multi-sector approach, and multi-cap orientation.

The fund will allocate 10-55% to fixed income instruments.

Further, it will allocate 10-55% to commodities, providing exposure to gold ETFs, silver ETFs, and exchange-traded commodity derivatives, according to the mutual fund house statement.

Also, the fund may allocate 0-10% to REITs/InvITs, focusing on investments for regular income, diversification, and an opportunistic approach.

While entry load will not be applicable, an exit load will be there for each purchase of units through lumpsum/switch-in /systematic investment plan (SIP) and systematic transfer plan (STP).

The fund will be jointly managed by Nimesh Chandan and Sorbh Gupta on the equity side; Nimesh Chandan and Siddharth Chaudhary on the fixed income side; and Vinay Bafna on commodities investment.

The exit load will be as follows:

If units are redeemed/switched out within one year from the date of allotment:

• Up to 30% of units allotted are redeemed/switched out – Nil.
• Any redemption/switch-out of units in excess of 30% of units allotted — 1% of applicable NAV.
• If units are purchased or switched in from another scheme of the fund are redeemed or switched out after one year from the date of allotment, no exit load is payable.

Speaking on the launch of the product, Ganesh Mohan, CEO, Bajaj Finserv AMC, said. “Bajaj Finserv Multi Asset Allocation Fund provides investors with an opportunity to access multiple asset classes through a single investment avenue. The fund’s asset allocation decisions are driven by a comprehensive evaluation of macroeconomic factors, valuation metrics, and investor behaviour. Our aim is to offer a well-rounded portfolio that can navigate through various market scenarios and deliver consistent returns.”

Nimesh Chandan, CIO, Bajaj Finserv AMC, highlighted the fund’s investment strategy, saying, “Our focus on dividend yield-based investing in the current scenario has the potential to minimise impact against volatility and maximise returns for the investors. Investors who are seeking reasonable returns, professional asset allocation, and an all-weather investment avenue with low volatility compared to pure equity funds can consider Bajaj Finserv Multi Asset Allocation Fund.”

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

AMFI to soon unveil guidelines to curb front-running and insider trading in mutual fund houses

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Association of Mutual Funds in India (AMFI) will introduce a standardised operating procedure (SOP) for asset management companies (AMCs) within a month. This will be in order to curb potential market abuse, including front-running and insider trading, AMFI Chief Executive Venkat Chalasani said while making the monthly mutual fund data announcement.

This decision follows a directive from the Securities and Exchange Board of India (SEBI) on April 30, urging AMCs to establish a structured institutional mechanism for identifying and deterring market abuse.

SEBI will outline broad guidelines, with AMFI tasked to develop specific standards.

The regulator aims to enhance surveillance and internal control procedures within AMCs to detect misconduct and prevent misuse of sensitive information.

Additionally, SEBI plans to increase accountability among AMC management for any instances of misconduct.

To ensure transparency and accountability, AMCs will be required to implement a whistle-blower mechanism. This mechanism is intended to encourage employees to report any suspicious activities without fear of reprisal.

The need for such measures became apparent following instances where mutual fund employees were implicated in front-running trades for personal gain.

In response, SEBI imposed stricter norms on MF staff and fund managers. At present, AMC employees must document all face-to-face communications during market hours, including those that occur outside the office.

However, SEBI may grant exemptions to these requirements once the institutional mechanism is in place.

Previously, SEBI had brought mutual fund units under its prohibition of insider trading regulations to prevent employees and key staff from engaging in dealings based on unpublished price-sensitive information (UPSI).

Certain cases revealed key personnel redeeming their holdings in schemes before information was shared with other unit holders, prompting regulatory action.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SIP inflows cross ₹20,000 crore for the first time in April

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Systematic Investment Plan (SIP) inflows have breached the ₹20,000 crore mark for the first time in April 2024. According to data released by the Association of Mutual Funds in India (AMFI), SIP contributions reached a record high of ₹20,371.47 crore in April 2024, surpassing the previous month’s figure of ₹19,270.96 crore.

This surge in SIP inflows has further supported the industry’s Net Asset Under Management (AUM), which stood at ₹57.26 lakh crore for April 2024, up from ₹53.40 lakh crore in March 2024.

The increase in new SIP registrations further underscores the growing interest of investors in mutual fund investments.

In April 2024, the number of new SIPs registered totaled 63.65 lakh.

Commenting on these developments, Venkat Chalasani, Chief Executive of AMFI said, “The Mutual Fund Industry has witnessed significant growth, with SIP contributions reaching ₹20,371.47 crore and the total SIP AUM reaching ₹11.26 lakh crore in April 2024. Additionally, the number of SIP accounts has reached a new high of 8.70 crore.”

Notably, the net equity mutual fund inflows in April witnessed a decline to ₹18,888 crore from ₹22,576 crore in the previous month.

As per Chalasani, the dip in April’s mutual fund inflows were not impacted by ongoing Know Your Customer (KYC) compliance issues.

He revealed that currently, 93% of accounts either possess KYC registered or KYC Validated status, with only 3% encountering ‘KYC Hold’ status.

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93% mutual fund accounts KYC validated or registered, April’s numbers not hit by compliance issues: AMFI

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Venkat Chalasani, Chief Executive Officer, Association of Mutual Funds in India (AMFI), on Thursday (May 9) said that decline in April’s mutual fund inflows were not impacted by ongoing Know Your Customer (KYC) compliance issues.

Despite dip in net equity mutual fund inflows from ₹22,576 crore to ₹18,888 crore compared to the previous month, Chalasani emphasised that the system is functioning effectively.

He revealed that currently, 93% of accounts either possess KYC registered or KYC Validated status, with only 3% encountering ‘KYC Hold’ status.

In response to Securities Exchange Board of India’s (SEBI’s) latest directive on KYC norms, AMFI provided clarity on guidelines for investors:

• KYC verified investors retain the flexibility to invest in any Mutual Fund (MF) scheme.
• KYC registered investors can continue their investments in Asset Management Companies (AMCs) where they already hold investments.
• Investors facing KYC hold status should to rectify their KYC status promptly with valid documents.

Chalasani further highlighted that 98-99% of MF transactions are processing smoothly.

This includes purchases and redemptions, despite the challenges posed by KYC compliance.

AMFI is actively involved in resolving KYC issues for investors, especially those with ‘KYC on hold’ status.

It must be noted that media reports earlier indicated that approximately 1.3 crore mutual fund accounts are currently ‘on hold’ due to incomplete KYC compliance.

These accounts had their KYC processes completed using documents such as electricity bills, telephone bills, and bank account statements.

However, under SEBI’s latest directive, these documents are now considered invalid for KYC purposes.

Officially valid documents now include an Aadhaar card, passport, and voter ID card.

Consequently, investors with accounts flagged as ‘on hold’ are currently restricted from engaging in any transactions within mutual funds, whether buying or selling units.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Motilal Oswal Institutional is bullish on these sectors

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Motilal Oswal Institutional Equities is overweight on the telecom sector and prefers the defence sector within public sector units (PSUs).

Niket Shah, CIO of Motilal Oswal Institutional said the defence sector has performed strongly primarily due to earnings growth.

However, apart from defence, most PSUs have not experienced significant increase in earnings.

Overall earnings have grown at 10-12% for most of the Nifty companies, but it is a moderation from the average 23-24% earnings growth over the three years. This has caused some consolidation, he noted.

Similarly, in midcaps, the earnings growth has slowed to 18-20% from 34% over last three years.

Motilal’s view on new KYC norms:

The introduction of new Know Your Customer (KYC) regulations for mutual funds, effective April 1, 2024, has changed how investors can access mutual fund schemes.

Sharing his view on the changes and the implications for investors, Prateek Agrawal, CEO of Motilal Oswal Asset Management said, “For an existing AMC it is less of an issue. For a new AMC new investor, it is more of an issue. We did see some delays in on boarding for sure. But in spite of that, I think we had a growth month-on-month in April over March and April was our peak month actually.”

As per the new rules, mutual fund investors need to ensure that the KYC status for all the MF schemes with all the asset management companies (AMCs) are validated., not just verified or registered.

If your KYC status is “Validated,” it means that the documents you submitted have been checked with the source that issued them.

The validation will happen only if your Aadhaar card is linked to the PAN card and other details such as your contact number and email id are correct and operational.

You can no longer use bank statements and passbooks as valid proof of identification or proof of address now for completing KYC.

Also Read | Is your mutual fund account on ‘hold’? Here’s why this is happening and what you should do

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Equity mutual fund inflows dip in April amid pre-election volatility, hybrid funds thrive

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In April, net equity mutual fund inflows witnessed a decline to ₹18,888 crore from ₹22,576 crore in the previous month, as reported by the Association of Mutual Funds in India (AMFI).

Experts attribute this downturn to the prevailing high-pitched political environment.

Despite this overall trend, notable shifts were observed across various fund categories.

Small-cap funds experienced an inflow of ₹2,209 crore, contrasting sharply with the previous month’s outflow of ₹94 crore.

Mid-cap funds also saw healthy inflows, rising to ₹1,793 crore from ₹1,018 crore in March.

Conversely, large-cap funds experienced a decrease in inflows, settling at ₹358 crore compared to ₹2,128 crore in the previous month.

Hybrid funds emerged as a highlight, witnessing a substantial increase in inflows, reaching ₹19,863 crore compared to ₹5,584 crore in March.

In the liquid funds and exchange-traded funds (ETFs) categories, movements were mixed.

Liquid funds recorded a decrease in inflows to ₹1.03 lakh crore from ₹1.58 lakh crore in the previous month, while ETF inflows also declined to ₹5,747 crore from ₹10,560 crore.

Tax-saving equity mutual funds, or ELSS Funds, experienced a reversal in flows, moving from an inflow of ₹1,789 crore in March to an outflow of ₹144 crore in April. Additionally, credit risk funds saw a modest outflow of ₹359 crore compared to ₹321 crore in March.

In the debt segment, total inflows stood at ₹1.90 lakh crore, a slight decrease from the previous month’s outflow of ₹1.98 lakh crore.

In April, the number of new fund offerings (NFOs) was lower, with only 9 new schemes launched, raising a total of ₹1,532 crore.

This is a decrease from March, which saw 19 schemes launched, raising ₹4,146 crore.

DP Singh, Deputy Managing Director and Joint CEO at SBI MF, dismissed the notion that the decline in equity mutual fund inflows for April could be attributed to Know Your Customer (KYC) issues.

Around 1.3 crore mutual fund accounts currently face KYC compliance issues due to SEBI’s latest directive, which invalidates documents such as electricity bills, telephone bills, and bank account statements for KYC purposes.

However, this had no impact on mutual fund inflows.

Singh highlighted that in a highly charged political environment with increased market volatility, smart investors tend to exercise caution and prefer to stay on the sidelines.

Notably, institutional investors and high-net-worth individuals (HNIs) have shown reluctance to commit funds to large-cap funds during such periods, resulting in negative flows or reduced inflows.

Singh clarified that the outflow from large-cap funds differs from the inflow into mid-cap and small-cap funds, indicating distinct investor behavior.

He further pointed out a continuing rally in small-cap and mid-cap segments, driven by an influx of foreign investments previously concentrated in top Nifty stocks, which are now diversifying into mid-cap and small-cap segments.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why ETFs tracking international indices are available at significant premiums on Indian stock exchanges

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Exchange-Traded Funds (ETFs) that track international indices are currently available at significant premiums on Indian stock exchanges. This increase stems from recent regulatory measures implemented by the Securities and Exchange Board of India (SEBI).

SEBI’s decision to halt asset management companies (AMCs) from investing in overseas ETFs, effective April 1, has triggered a domino effect.

With traditional avenues for international investment restricted, ETFs tracking international indices have emerged as the go-to option for investors. However, the surge in demand for these ETFs, coupled with limited supply, has led to increase in premiums, according to a Value Research report.

Typically, ETF prices are expected to hover around their net asset value (NAV). However, the current scenario sees a vast majority of ETFs trading at premiums far exceeding their NAV.

This means investors are effectively paying more for the underlying assets than their actual value.

“For instance, ETFs like the Mirae Asset NYSE FANG+ ETF and Mirae Asset S&P 500 Top 50 ETF are being sold at premiums of 23.9% and 15.2%, respectively,” Value Research said.

Here’s a table showing the premiums of some of the ETFs:

(Source: Value Research)

Such premiums alter the investment landscape and impact potential returns.

While purchasing ETFs at a premium might seem like a viable option, it fundamentally alters the risk-return profile of the investment.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Baroda BNP Paribas MF launches retirement fund: Should you invest?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Baroda BNP Paribas Mutual Fund (MF) on Wednesday (May 8) launched Retirement Fund, an open-ended retirement solution-oriented scheme having a lock-in of five years or till retirement age (whichever is earlier).

The new fund offer or NFO of the scheme is open for subscription till May 22.

The scheme will open for continuous sale and repurchase within five business days from the date of allotment.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow