Foreign-focused funds start yielding higher returns

MUMBAI: Retail Indian investors who believed investing in funds that buy overseas assets will yield higher returns are beginning to see their faith rewarded after a long wait. 

Funds such as Birla Sun Life Commodity Equities Fund , Fidelity Global Real Assets Fund , and ING OptiMix Global Commodities are outperforming domestic funds, due to the recovery in the west and concerns over Indian companies' earnings growth. 

Rising commodity prices, which have been a drag on Indian equities, have done the opposite for international funds, helping them gain as the prices of copper, crude and rubber rise. This is the first time international funds have met their prime investment objectives - to stay non-correlated to Indian markets, provide portfolio diversification and generate higher returns. 


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RIL enters financial services business

RIL enters financial services business

BS Reporter / Mumbai March 28, 2011, 0:25 IST

Sets up joint venture with D E Shaw Reliance Industries (RIL) Chairman Mukesh Ambani has finally entered the financial services space. This comes just days before the Reserve Bank of India is expected to announce the draft guidelines for entry of new banks.

RIL today set up a joint venture with the DE Shaw Group to offer an array of financial services, a statement by the companies said, without giving details of the financial terms.

RIL is free to enter almost any sector after the two Ambani brothers ended a pact last year that prevented them from entering sectors where the other was present.

The partnership with DE Shaw will now see RIL compete directly with Anil Ambani’s Reliance Capital.

Sources familiar with the developments said RIL and DE Shaw were likely to build on the existing $800-million (Rs 36,000 crore) fund. DE Shaw has been in many ways following big hedge funds such as Citadel to compete with investment banks by offering diversified financial products. According to sources, RIL’s team is likely to play the lead role, but DE Shaw will assist in areas where it has core expertise. These include energy and carbon trading, energy and carbon derivatives, private equity, mutual funds and other security-linked products. “We would like to leverage DE Shaw’s expertise and offer the entire spectrum of services it has,” said an RIL official, without giving further details.

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Issues to be taken up by AMFI

These are some issues I feel we need to take up with AMFI as a IFA
fraternity

1. Trial fees should be payable monthly..not quarterly..no employee
gets salary monthly..why should we get the same quarterly?
2. Common Application form across all mutual funds..Today each AMC has
different forms for Debt/ Equity and different AMCs have different
forms..why cant a common application form be made which can be used
across all AMCs?
3. Non -Deduction of Service Tax
4. AMFI should focus more on Investor education through seminars/
advertisements on Mutual Funds.
5. Introduce an option in MF Application forms where we can mention
our fees so that it can be deducted from the clients investment. There
can be cap at 2% to prevent clients getting conned.

Regards
Praveen Kumar V
Capstone Investments
Bangalore

Disclosure of client information

Vani Govindarajan 
vani1964@gmail.com


Hi,

I received a few calls from Blue chip Investments,Neyveli, offering to service my investments, unwittingly by them not knowing that I am myself a distributor .On further prodding they told me that they received the list of my investments through CAMS, Trichy where their head office is based. Many of my clients have also informed me of having received such calls. I strongly object to the fact that my investment details are being shared with third parties. I am left with no option to take up this matter with SEBI .I strongly condemn such practices and urge upon you to immediately restrain BLUE Chip Investments from doing such activities and debar 

Regards

T K Vani
ARN 11724

The NSDL campaign

Dear Mr.Bhat,

What I wrote my investors today.

If you find it useful, request you to share the same with our group.

“NSDL (National Securities Depository Ltd.) has issued an advertisement today in a business newspaper asking us to be smart and hold mutual fund units in demat.

I’m getting an impression that there is an orchestrated effort (by whom, I don’t know) to monetarily benefit mainly depositories (NSDL is a depository), stock brokers and stock exchanges at the expense of investors and other channels.

I would be glad if I’m proven wrong. May be I’m a paranoid!

Gone are the days when mutual funds issued unit certificates.

Why not highlight the fact that mutual fund units are already in demat form. Why saying that you can demat something which is in anyhow in demat form?

So the concept of demating mutual funds is totally irrelevant.

This is like asking you to demat the account statement you get (if you hold shares) from your Demat account every quarter. Why they cannot think about ‘demat’ing this demat statement? Then you will get a statement for ‘demated demat’ account, which may needs to be demated again. The chain would go on. Confusing? For me too!

The same old sales pitch of consolidation. SEBI has recently mentioned that CAS (Consolidated Account Statement) would be soon made available to all investors. Like you are getting your account statements through email (monthly) and physical (quarterly), the mode and frequency of CAS would be advised by SEBI.

To obtain Consolidated account statement, even now, if you want, you can visit www.camsonline.com – Online services for Investors- Mailback Services- Consolidated Account Statement –CAMS+Karvy+FTAMIL – to obtain what NSDL is promising as you would get by demating the demated units.

Unlike demat, this comes at zero cost.

Also many advisors like us have the ability to provide consolidation of your holdings at the click of a button from our own software.

NSDL is saying you can view the valuation online.

To my understanding, in NSDL DP sites, you can see only the number of units and current value.

Whereas the reports I mentioned above is very detailed.

I think the impression is created in investors mind that online and demat are one and  the same. It is different.For example, you may create your own portfolio online free of cost in many personal finance portals. This is in addition what CAMS or your advisor provide you (as mentioned above).

If you ask my honest opinion, seeing the valuation of one’s investments (whether it is shares or mutual funds) constantly is a disease. This disease many a times totally ruins your financial health. Unless you are a trader, you do not need to constantly know value of your investments.

If you are a trader and not an investor, we would not be having professional relationship in the first place.

About other aspects mentioned in NSDSL advt., I think I’ve covered everything in my last post on Sunday (http://wisewealthadvisors.com/2011/03/20/demating-the-demat/ ). Instead of highlighting only advantages, if they highlight disadvantages the advertisement needs to be many times in size (like the blog I wrote on Sunday).

Mutual funds, a core product to be in an investor’s portfolio, have hardly penetrated. Probably there may not be more than 10 million investors in a country of 1150 million.

I hope regulatory authorities take a cue from LIC for making a product or concept reach across length and breadth of the country.

Even among mutual fund houses, UTI has better penetration across the country as their model is similar to that of LIC.

The stock exchange, stock broker and depository model have hardly made any inroads. You may read what Sucheta Dalal wrote about this in Moneylife last year. Mind boggling data and analysis.

It is better to follow a model which has succeeded in a country like India than a failed one.

Interestingly the SEBI (which controls mutual funds) chairman whose term ended recently was heading NSDL for over a decade before taking the position as SEBI chief.

Also I read yesterday an article written by Sucheta Dalal about NSDL in Moneylife, which has very many details I was not previously aware of.

You may click the below link to know more

NSDL behind regulatory fog:

http://www.moneylife.in/article/nsdl-behind-regulatory-fog/14893.html “

Regards

Muthu

D.MuthukrishnanCertified Financial Planner ^CM(CFP^CM)
Personal Financial Advisor

Mobile: +91-98404-03431

Email: muthu@wisewealthadvisors.com

         Wisewealth.advisors@yahoo.co.in

New Self Declaration Format - Is it Practically Possible

Dear All,

Recently we have been receiving mails from AMC's with regard to changes in the Self Declaration Format for advisors. Apart from the normal declaration the common New line that runs in all the format is as follows:

"In compliance with SEBI Circular no. SEBI/ IMD/CIR/No.4/168230/09 dated June 30, 2009, I/ we have disclosed to investors all the commissions (in the form of trail commission or any other mode) payable to me /us for the different competing schemes of various mutual funds from amongst which the scheme was recommended to our investors."

I would like to know whether this declaration will be practically possible. As you are aware there are multiple brokerage/trial being paid to distributors and it keeps changing month after month.

I think we need a good amount of discussion and a representation to Sebi/Amfi on this subject.

I request each one of the IFA to respond to this query. Do not submit your response at the earliest.

Regards

MONEY KARE
At Money Kare, 
We Care for your Money 
Your Professional Investment Advisors
Mobile No. 9841016902

Problem in Signature

Dear Friends,

My client has a physical problem in him hand and he can’t n sign properly. He can’t have consistency in his signature and usually one out of 3 or 4 chqs only getting cleared by his bank.

He is planning to make a single purchase  in 5 different funds now and he will be making similar investments regularly. Now the problem is  getting his investment chqs cleared and the problem at the time of repurchase.

I had suggested online investment but here also I believe he has to sign initially the request forms. Is it possible to invest online even without having the initial signatures.

Kindly suggest me a solution for this problem.

Regards,

 

J.C.Thirumurugan,

Financial Consultant, WCMS -  Wealth Creation & Management Services.

66/A-102, 70 Feet Road,Periyar Nagar,Chennai - 600 082. Indiawww.wcms.in, jct_murugan@wcms.in, Mobile : 9840766610

NISM's CPE has now replaced the AMFI Refresher Course

Greetings from CIEL

 As you may be aware, the certification process for mutual fund distributors has undergone a change from June 1, 2010. Please see www.nism.ac.in for details. The AMFI Refresher Course (earlier mandated for those whose certificate validity has expired) has now been replaced by the continuous professional education (CPE) program of the NISM.

Procedure for registration:

 Kindly reply to this email (with name, PAN no and ARN no/AMFI Certificate no) confirming your attendance for the said programme, so that we can block your seat. There are limited seats available for the program. Registrations would close 3 days prior to the program date.

 You need to bring the following documents for verification to the venue :

·             Copy of ARN Card (kindly carry the original for verification)/AMFI or NISM Certificate (in case of employees who do not have  ARN cards in their own name)

·             Copy of PAN Card (kindly carry the original for verification)-Mandatory

·             2 passport size photographs

·             Duly filled New Registration Form (enclosed)

·             DD for Rs 1500/- payable in Mumbai , favouring National Institute of Securities Markets.

If there is anything else you would like to know, please drop an e-mail to cpe@ciel.co.in or contact Ms Meghna on 9552551360

Please go through the following :-

Eligibility Criteria: Type I: Any person who has appeared for the NISM/AMFI Certification Examination(s) for Mutual Funds and/or the AMFI Refresher Course/ NISM CPE for Mutual Funds and the certificate for such examination/refresher course/ CPE is still valid may appear for NISM CPE for Mutual Fund Distributors on submission of required documents. 

Documents Needed to be SUBMITTED For Type I: 1. Photocopy of PAN card; 2. Photocopy of either: ARN Card or NISM or AMFI Examination/ Refresher Course/ CPE Certificate.

Type II (a): Any person who has attained the age of 50 years as on May 31^st 2010 whether holding or not holding an ARN card and/or certificate for NISM Certification/ CPE or AMFI Examinations/ Refresher Courses for Mutual Funds, may appear for NISM CPE on submission of required documents. Documents Needed to be SUBMITTED for Type II (a): Photocopy of PAN card

Type II (b): Any person having at least 10 years of total experience as on May 31^st 2010 in the sale and distribution of mutual funds, whether holding or not holding an ARN card and/or certificate for NISM Certification/ CPE or AMFI Examinations/ Refresher Courses for Mutual Funds, may appear for NISM CPE on submission of required documents. Documents Needed to be SUBMITTED for Type II (b): 1. Photocopy of PAN card; 2. Photocopy of either: ARN Card or NISM or AMFI Examination/Refresher Course/CPE Certificate (not mandatory) 3. A letter on Letter Head of a Mutual Fund /National Distribution house/Registrar and Transfer Agent for Mutual Funds, signed by an authorized signatory certifying that the candidate has been employed /engaged in the sale and/or distribution of mutual fund products for a period of atleast 10 years.

Please note that candidates are required to CARRY IN ORIGINAL the above mentioned documents (as listed for each Type) to the CPE venue for verification in order to obtain permission for appearing for CPE for Mutual Fund Distributors.

Please note that if neither the ARN Card nor the relevant certificate is presented for validation along with submission of a photocopy, request for inclusion of such details in NISM CPE Certificate will not be entertained.

From January 1, 2011 onwards, CPE requirements have to be complied within the validity period of the certificate.

Thanks and Regards,

Meghna Raveendra,

Centre for Investment Education and Learning Ltd.

 +91 9552551360

Trichy Seminar held on 5th March 2011

Dear IFAs and AMC Friends,

We thank you very much for your great support.  

With your support the knowledge seminar conducted at Trichy, SRM Hotel (Royal Southern) went on very well.  

There were totally 165 Registered attendees from entire parts of Tamil Nadu (Even Tier III Cities).  

We thank one and all for attending the making the seminar the great success.  As scheduled it started at sharp 8 am with Breakfast and ended at 4.30 pm with Hi Tea.

We had received lot of appreciation feed back from your end.  Please let us know any discomfort your had faced in the seminar so that we can correct it in our next seminar.  

Our special thanks are due to TIFAA Team without their support we might not have conducted this seminar in such a great manner.

Also we are receiving various feed back from various IFAs across the country (PAN India) to conduct the seminars at their City and Town. 

We are ready to conduct the Knowledge seminar at your place provided 20 to 25 IFAs join together start a local chapter (Association) and write to us to conduct the Knowledge Seminar at your Town or City. To create local chapters you need any help please email us to ifagalaxy@gmail.com

Click Here to view the photos of IFA Galaxy Knowledge Seminar

Ramesh Bhat K

President

IFA Galaxy

Sundaram AMC and other AMC Issues

Dear Friends,

    Pl tell me whether anyone has got brokerage for sundaram 2 year fmp launched in Jan 2011 - I am finding difficulty in following with the AMC every time.

Regards,
Alagappan
9841055577

How to Charge Fee?

Dear Mr.Ramesh Bhat :

 

At the outset, I congratulate you for the wonder session conducted at Trichy on 5th March 2011.  During that session, we discussed abouthow to charge a customer and we tried our level best to get suggestions from the participants. 

 

I furnish below my suggestions :

 

In India, if option is given to someone, they will try to take the easy and the one which is favourable to them.  ( Ex :  If wearing helmelt is optional, no one would wear and if the same is made compulsory everyone would wear )

 

In our business, paying fees to the AMFI Registered distributor is optional.  Each and every AMC has printed in their KIM ( Common application form ) like this "  Upfront commission shall be paid directly by the investor to the AMFI Registered Distributors based on the Investors' assessment of various factors including the service rendered by the distributor. "

 

The AMCs have printed the above just to satisfy the distributor.  Nothing else !!

 

My suggestion is  :  Instead of printing the above, they have to print a separate declaration on the bottom of the second page of the common application form.  I suggest a format also.

 

Declaration by the Investor/s :

 

I understand that as per SEBI Circular no : SEBI / IMD / CIR No.4 / 168230 / 09 dated June 30, 2009, no entry load will be charged by the scheme to the investor effective August 1, 2009.  Upfront commission shall be paid directly by the investor to the AMFI Registered Distributors based on the Investors' assessment of various factors including the service rendered by the ARN Holder. 

 

I have given a cheque for Rs. xxxxxxx / - in favour of " Scheme Name " through Mr. XXXXX having ARN XXXXX.  I am satisfied with his advice and service rendered to me and I am paying a fee of Rs.XXX to Mr. XXXXX having ARN XXXXX. 

 

 

Signature of the 1st applicant                Signature of the 2nd applicant                            Signature of the 3rd applicant

 

 

If the above is made compulsory, i.e., without the declaration by the investors the transaction should not be processed, then the ARN holders would collect fees based on their advice and service.  To my understanding, SEBI has not fixed any ceiling w.r.t. fees payable by the investor to the distributor.  Hence, based on the distributors quality the fees would vary.  The investors has got the freedom to pay any amount. 

 

I look forward to your comments.

 

Thanks and Best Regards,

Balaji.K

Mobile : 97900 1112

balaji.kay@gmail.com