Thursday, June 11, 2009

SEBI may scrap entry load on MF investors

The Indian mutual fund industry is set to change forever. Tilting towards a more investor-friendly mode with market regulator SEBI set to bring one of the biggest reforms the industry has ever seen - the power to investors to decide the commission they pay and scrapping entry loads.
It’s time for reform. For long investors have had to pay commissions every time they bought a mutual fund, without knowing the extent of it. Distributors, on the other hand, have happily pushed funds depending on the commission they earned from a mutual fund. All that is set to change, perhaps, as early as June 18, when the Securities and Exchange Board (SEBI) board meets.
SEBI is planning to scrap entry loads on investors and, more importantly, make it mandatory on distributors to disclose how much of what the investor is paying is going into the distributor's pocket.

In other words, when you buy a mutual fund, you would cut two cheques—one towards investment and the other towards the commission you need to pay.

Needless to say, once charges are out in the open, an investor would have the right to decide and dictate commissions. A transparent regime could also fuel intense competition and bring down commission rates, as was the case in the broking industry.

And even though mutual funds and distributors have been lobbying hard to keep this reform in abeyance, sources tell CNBC-TV18 that SEBI is determined to empower investors with greater transparency.

Tushar Pradhan appointed CIO, HSBC Asset Management (India)

HSBC Asset Management (India), today announced the appointment of Tushar Pradhan as CIO of HSBC Mutual Fund from June 15.
As CIO, Pradhan will be responsible for all investment activities and investment strategy, a press release issued here stated.
Pradhan, an MBA in investment finance, has over 17-years of experience in fund mangement.
He has worked in the US for a couple of years before returning to India to work with HDFC Asset Management and more recently with AIG Global Asset Management, the release said.
HSBC Asset Management (India) CEO, Vikramaaditya, said that "the mutual fund industry has huge potential in India and this key appointment underlines our commitment to become one of the leading asset management companies in India."

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Aggrasive Portfolio

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  • Reliance Growth Fund (Stock Picker Fund) 11%
  • IDFC Premier Equity Fund (Stock picker Fund) (STP) 11%
  • HDFC Equity Fund (Mid cap Fund) 11%
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  • HDFC TOP 200 Fund (Large Cap Fund) 8%
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  • Principal MIP Fund (15% Equity oriented) 10%
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Moderate Portfolio

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  • Reliance Vision Fund (Large Cap Fund) 10%
  • IDFC Imperial Equity Fund (Large Cap Fund) 10%
  • Reliance Regular Saving Fund (Stock Picker Fund) 10%
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  • HDFC Prudence Fund (Balance Fund) 9%
  • ICICI Prudential Dynamic Plan (Dynamic Fund) 9%
  • Principal MIP Fund (15% Equity oriented) 10%
  • IDFC Savings Advantage Fund (Liquid Fund) 6%
  • Kotak Flexi Fund (Liquid Fund) 6%

Conservative Portfolio

  • ICICI Prudential Index Fund (Index Fund) 16%
  • HDFC Prudence Fund (Balance Fund) 16%
  • Reliance Regular Savings Fund - Balanced Option (Balance Fund) 16%
  • Principal Monthly Income Plan (MIP Fund) 16%
  • HDFC TOP 200 Fund (Large Cap Fund) 8%
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  • JM Arbitrage Advantage Fund (Arbitrage Fund) 16%
  • IDFC Savings Advantage Fund (Liquid Fund) 14%

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