Monday, February 16, 2009


NFO Nest
(February 2009)

NFOs on a free fall

Fund houses appear to have have hit the pause button on new scheme launches. After having mobilised Rs 22,809 crore from new schemes in September 2008 (FMPs flooded the market) , the highest in the past 12 months, fund houses have managed to collect a mere Rs 37 crore from new schemes in January, 2009. Just five schemes were launched in January and the sales from new schemes for the month were the lowest in the last one year. The fall has been particularly steep in the last three months with sales nose-diving from Rs 4,229 crore in November 2008 to Rs 762 crore in December 2008, according to data from Association of Mutual Funds in India (AMFI). While fund houses launched 103 schemes in September 2008, it came down to 36 in November 2008 and 21 in December 2008.

The following funds find their place in the NFO Nest in February, 2009.

Shariah BeES
Opens: 4 Feb, 2009 Closes: 25 Feb, 2009

Benchmark Mutual Fund has launched the first ever Shariah Benchmark Exchange-traded scheme in India. The investment objective of the scheme is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the S&P CNX Nifty Shariah Index by investing in securities which are constituents of S&P CNX Nifty Shariah Index in the same proportion as in the Index. It will enable millions of muslims and other investors to participate in stock markets. To be Shariah compliant, the fund will not invest in business activities related to pork, alcohol, gambling, financials, advertising and media (newspapers are allowed and sub-industries are analysed individually), pornography, tobacco and trading of gold and silver. The scheme will be benchmarked against the S&P CNX Shariah index, an index that was launched by Standard & Poor's and India Index Services & Products. Each unit is priced at 1/10th of the S&P CNX Nifty.

HSBC Asset Management has launched a Shariah portfolio scheme for affluent Indian investors. The HSBC Amanah India Shariah Portfolio is an actively managed open ended equity offering wherein investors can invest in conformity with Islamic Shariah principles. Minimum investment amount for this customised product in Rs 2.5 million.

Globally, Shariah compliant investments add up to USD 65 billion. Around 53% of the assets, or USD 35 billion, is held in mutual funds; out of this, USD 33.6 billion is managed by local fund managers and remaining USD 1.4 billion is managed by foreign fund managers. Saudi Arabia is the largest market in the world for Shariah mutual funds measured in terms of number of funds or by assets. In Asia, Malaysia is also the most important market for Shariah funds. Internationally, other prominent markets for Shariah products are Middle East countries, Indonesia, Pakistan, United States and South Africa. There are more than 800 Shariah-compliant stocks in Indian bourses; Pakistan, a favoured Islamic capital market investment destination, has only 30 Shariah-compliant scrips out of some 700-odd companies. The current share of Indian Shariah compliant market capitalisation (at over 60%) is highest even when compared with the number of Islamic countries such as Malaysia, Pakistan and Bahrain.

IDFC India GDP Growth Fund
Opens: 28 Jan, 2009 Closes: 26 Feb, 2009

The fund would endeavour to represent the growth in GDP by capturing the growth in the constituents of the GDP. The scheme will invest 65-100% in equity and equity related instruments and up to 35% in debt and money market instruments. Investment in derivatives will be up to 50% of net assets. Investments in securities lending and foreign debt instruments will be up to 35% (each) of the net assets of the scheme. Investment in ADRs and GDRs issued by companies in India, as permitted by SEBI regulation can go upto 50% of the net asset of the scheme. The benchmark index for the scheme is BSE 500 index.

HSBC Floating Rate - LT (Div-W)
Opens: 20 Feb, 2009 Closes: 20 Feb, 2009

The fund aims to generate reasonable returns with commensurate risk, from a portfolio comprised of floating rate debt instruments and fixed rate debt instruments, swapped for floating rate returns. The scheme may also invest in debt and money market instruments.

Canara Robeco Short Term Fund, DBS Chola Select Income Fund, ICICI Prudential Global Basics Fund, Reliance Infrastructure Fund, Bharti AXA G-Sec Fund and ICICI Prudential Dividend Yield Fund are expected to be launched in the coming months.

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