NFONEST

March 2013

NFO Collections – from a mammoth to a mole!

Gone are the days when a fund collected Rs 5000 to Rs 6000 crore from its NFO. Only 12 equity funds have been able to collect Rs 100 crore each or in excess of that since 2010. A host of reasons are responsible for this slowdown. Lack of new investment themes, completed product basket, uncertain markets, slash in marketing budgets, distributor’s unwillingness to sell new funds, and regulatory curbs like SEBI’s reluctance to clear similar looking funds have made the AMCs hit the stop button on new fund launches. Data provided by Value Research shows that a total of 48 funds have been launched since 2010 but only a handful of them have been able to attract the interest of distributors and investors. DSP Black Rock Focus 25, launched in April 2010, tops the chart, collecting Rs 478 crore, followed by SBI PSU Fund launched in May 2010, which collected Rs 442 crore. The third fund on the list of top NFO mobiliser is HSBC Brazil Fund, which mopped up Rs 313 crore. In 2012, only one fund - Axis Focus 25 Fund managed to collect a respectable Rs 250 crore from 16000 albeit with a lot of support from Axis Bank. A few funds have had to make do with modest collections in the range of Rs 1 crore to Rs 10 crore. 

With the markets looking up, the March 2013 NFONEST sports a spicy variety, notwithstanding paltry NFO collections.

ICICI Prudential Nifty ETF

Opens: March 1, 2013

Closes: March 18, 2013

ICICI Prudential Nifty ETF, an open-ended index exchange traded fund, aims to provide returns before expenses that closely correspond to the total return of the underlying index, subject to tracking errors. Units issued under ICICI Prudential Nifty ETF qualify to be eligible security under Rajiv Gandhi Equity Savings Scheme, 2012. The investment objective of the fund is to allocate 95% to 100% of assets in securities of companies constituting CNX Nifty Index (the underlying index) with medium to high-risk profile. On the flipside, it will allocate up to 5% of assets in money market instruments having residual maturity up to 91 days with low to medium risk profile. The fund's performance will be benchmarked against CNX Nifty. The fund will be managed by Kayzad Eghlim.

Birla Sunlife RGESS Series I

Opens: February 25, 2013

Closes: March 20, 2013

Birla Sun Life Rajiv Gandhi Equity Savings Scheme-Series 1 (BSL RGESS - Series 1) is a 3-year close-ended equity mutual fund eligible under Rajiv Gandhi Equity Savings Scheme (RGESS) 2012. The fund offers both - first time and existing equity investors across the country, an opportunity to participate in India's expected robust economic growth, through investment in blue chip companies which are a part of BSE-100, CNX-100, and Public Sector Enterprises (PSE) categorised as Navratnas, Maharatnas, and Miniratnas as per the Central Government. Categorised under tax savings solutions of Birla Sun Life Mutual Fund, BSL RGESS - Series 1 will invest in a mix of top 100 listed companies of India and quality PSE stocks to create a diversified portfolio of securities. The objective will be to identify business with superior growth prospects and strong management available at reasonable valuation and offering higher risk adjusted returns. The fund will allocate 95% to 100% of assets in equity securities specified as eligible securities for RGESS with medium to high-risk profile. On the other side, it will allocate up to 5% of assets in cash and cash equivalents and money market instruments. Benchmark index for the fund will be CNX 100. The fund manager for Birla Sun Life Rajiv Gandhi Equity Savings Scheme - Series 1 is Mr. Nishit Dholakia who manages Birla Sun Life Dividend Yield Plus, Birla Sun Life Pure Value Fund, and Birla Sun Life '95 Fund (jointly managed with Mr. Prasad Dhonde). The fund manager will primarily focus on long-term growth for identifying stocks. The fund will follow a blend of bottom up approach (for stock selection) and top down approach (for sector allocation).

ICICI Prudential Multi Yield Series 3 Plan A

Opens: March 11, 2013

Closes: March 20, 2013

ICICI Prudential Multi Yield Series 3 Plan A is a close-ended aggressive Monthly Income Plan (MIP). The primary objective of the fund is to seek to generate income by investing in a portfolio of fixed income securities/ debt instruments. The secondary objective of the fund is to generate long term capital appreciation by investing a portion of the fund's assets in equity and equity related instruments. The Benchmark Index of the fund is CRISIL MIP Blended Fund. The fund managers are Rajat Chandak and Rahul Goswami.

JP Morgan India Hybrid Fund Series 2

Opens: March 11, 2013

Closes: March 22, 2013

JP Morgan India Hybrid Fund Series 2 is a closed ended hybrid fund that will invest in a mix of equity and debt. The fund has a tenure of 1025 days. The fund will aim to generate returns by containing the interest rate volatility. The fund will invest at least 65% of the assets in fixed income securities and the equity allocation is restricted to maximum 35%. The fund will allocate 65% to 95% of assets in debt securities and Government of India Securities with low to medium risk profile and up to 30% in money market instruments with low risk profile. On the other side, it will allocate 5% to 35% of assets in equity and equity related instruments with medium to high-risk profile. 48% to 53% of net assets will be invested in AAA rated non-convertible debentures and 30% to 35% of net assets will be invested in AA rated non-convertible debentures. The performance of the fund will be compared with an artificial benchmark comprising 90% of CRISIL Short Term Bond Fund Index and 10% of BSE 200. Namdev Chougule, Ravi Ratanpal, Amit Gadgil, and Karan Sikka are the fund managers.

IDFC Banking Debt Fund

Opens: February 26, 2013

Closes: March 26, 2013

IDFC Banking Debt Fund, an open-ended income fund aims at generating stable returns with a low risk strategy by creating a portfolio that is invested in debt and money market instruments issued by scheduled commercial banks. The fund will allocate 80% to 100% of assets in debt and money market instruments of scheduled commercial banks. On the other hand, it will allocate up to 20% of assets in CBLO, Repo, T-Bills and Government Securities. The performance of the fund will be benchmarked against CRISIL Short Term Bond Fund Index. The fund will be managed by Mr. Anupam Joshi.

JP Morgan India Hybrid Fund Series 3, HDFC Ultra Short-term Opportunities Fund, Tata Dual Advantage Fund (Schemes A to D), Reliance RGESS Fund, Axis Money Market Fund, Peerless RGESS Fund, DSP BlackRock Dual Advantage Fund Series 16 to 20, Reliance R* Shares Nifty ETF, and ICICI Prudential RGESS Series 1 to 5 are expected to be launched in the coming months.