LIC Mutual fund: Nomura to take 35% stake

Japan's Nomura is set to take a 35 percent stake in LIC Mutual Fund, the Business Standard reported on Wednesday, citing sources. The board of the mutual funds parent, state-owned Life Insurance Corp (LIC), has already approved to induct Nomura as a strategic partner and has formed a four-member committee to decide the valuations and conditions, the newspaper said, "We are in the middle of the process. Therefore we cannot give you a time line," LIC's managing director, Thomas Mathew, was quoted as saying in the paper. LIC Mutual Fund is expected to be valued at about 15 billion rupees ($320 million) or 6 percent of its assets under management, the paper said, citing an unnamed industry expert.

****

Mutual Fund news 1 June 2009

• Sundaram BNP Paribas Select Thematic Fund declares dividend

Sundaram BNP Paribas has declared dividend under the dividend option of Sundaram BNP Paribas Select Thematic Fund. The record date for the dividend is set as 05 June 2009.
The quantum of the dividend will be Rs 1.00 per unit i.e. 10% on face value of Rs 10 per unit on the record date. The scheme recorded a NAV of Rs 13.1324 unit as on 29 May 2009.
Sundaram BNP Paribas Select Thematic Fund is an open ended equity scheme with an objective to achieve long term capital appreciation by investing primarily the equity and equity related instruments of companies in the entertainment business.

• Reliance MF declares dividend for Quarterly Interval Fund

Reliance Mutual Fund has declared dividend under dividend option of Reliance Interval Fund - Quarterly Interval Fund -Series III. The record date for the dividend is 05 June 2009.
The fund house has decided to offer dividend on the face value of Rs 10 per unit for both plans viz. retail and institutional plans. The quantum of dividend will be 100% of distributable surplus as on the record date.
The NAV for the scheme under retail plan was Rs 10.1382 per unit and under institutional plan was Rs 10.1449 per unit as on 28 May 2009.
Reliance Interval Fund - Quarterly Interval Fund, is a debt oriented interval scheme with an investment objective to seek to generate regular returns and growth of capital by investing in a diversified portfolio of Central and state government securities and other fixed income/ debt securities normally maturing in line with the time profile of the plan with the objective of limiting interest rate volatility

• ICICI Pru Income Opportunities Fund announce changes

ICICI Prudential mutual fund has approved changes in minimum application amount and exit load structure of ICICI Pru Income Opportunities Fund. The proposed changes will be in operation from 1 June 2009.
Accordingly, the minimum application amount for all fresh purchases/switches for institutional option under the scheme will be Rs 10 lakh and in multiples of Re 1 thereafter.
Hereafter, the scheme will charge an exit load of 1.00% for an investment upto Rs 1 crore, if the amount sought to be redeemed or switched out is invested for a period of upto one year from the date of allotment and it will not charge any exit load if the amount sought to be redeemed or switched out is invested for a period of more than one year from the date of allotment. The scheme will not charge any exit load for an investment of Rs 1 crore and above.
The scheme is an open ended income fund that intends to generate income through investments in a range of debt and money market instrument of various credit ratings and maturities with a view of maximizing income while maintaining an optimum balance of yield, safety and liquidity.

• Religare Gold Exchange Traded Fund seeks Sebi`s approval

Religare Mutual Fund has filed offer document with Securities and Exchange Board of India (Sebi) to launch new fund named as Religare Gold Exchange Traded Fund, an open-ended gold exchange traded fund. Each unit will have a face value of Rs.100 each and each unit is approximately equal to price of 1 gram of gold.

Details of the Religare Gold Exchange Traded Fund:

The scheme seeks to generate returns that closely correspond to the returns provided by investment in physical gold in the domestic market, subject to tracking error.
Minimum application amount: For retail investors, the minimum application amount will be Rs 5000 and in multiple of Re 1 thereafter. For authorized participants and large investors, the minimum application amount will be Rs 15 lakh and in multiple of Re 1 thereafter or 1 kilogram gold per application and in multiples of 1 kilogram gold thereafter. The gold should be of finesses of 995 parts per 1000, i.e. 99.5%.
The scheme seeks to collect a minimum corpus of Rs 1 crore during NFO period.
Asset allocation: The scheme will invest 90-100% in physical gold with medium risk profile. The fund will be having investment exposure up to 10% in debt and money market instruments with low to medium risk profile. Investments in securitized debts can be made by the scheme up to 10% of the net assets. The scheme may invest in warehouse receipts and other instrument having gold as underlying and units of international gold linked ETF, as and when permitted by Sebi.
Load structure during NFO period: The scheme will charge an entry load of 1.50% in respect of each purchase/ switch in of units less than Rs 15 lakh in value. In respect of each of each purchase/ switch in of units greater than Rs 15 lakh and less than Rs 50 lakh in value, 1.00% entry load is payable. In respect of each purchase/switch-in of units equal to or greater than Rs. 50 lakh and less than Rs. 1 crore in value, an entry load of 0.50% is payable while in respect of each purchase/switch-in of units equal to or greater than Rs. 1 crore in value, no entry load is levied.
However, the fund will not levy exit load.
Load structure during on going period: The Fund will not ask both entry and exit load.
Benchmark index: The performance of the scheme is being benchmarked to price of gold.
Fund manager: Gautam Kaul is the fund manager for the scheme.

• Reliance MF rejoice Rs 1 lakh crore mark

Association of Mutual Fund of India (AMFI) has started to release the data of Average Asset Under management (AUM) of the mutual fund for the month of May 2009. Till now the data is available for only 3 fund houses.
AUM of Reliance MF jumped 16.23% in May 2009 over April 2009, as per AUM data released today. Reliance MF has crossed AUM of Rs 1 lakh crore that reached to Rs 1,02,730.16 crore in May 2009 from Rs 88,387.99 crore in April 2009.
AUM of Baroda Pioneer Mutual Fund soared by 85.09% to Rs 3483.36 crore in May from Rs 1882.01 crore in April 2009. Edelweiss Mutual Fund showed a rise of 41.61% in its average assets to Rs 20.63 crore in May from Rs 14.27 crore in April 2009.

****

Your Age And Your Investment Plan -- A lifecycle guide to investing

Age plays a key role in determining your investment profile. Hence, constructing a portfolio that suits your age is essential. By mapping your age and your background, you can establish a portfolio that comprises of different asset classes, in differing proportion. For example, if you are five years away from retirement, with no major savings for a post-retirement life, then you would build a portfolio comprising fixed income instruments. Similarly, a 24-year old would focus on parking investments in riskier investments like equities, since time is on his side.

We have constructed profiles based on your age and some assumptions. Then we have constructed a break-up of investments that can be used as a guide. You may wish to fine-tune this to meet your own requirements. While reading through these profiles, please note that these are typical attributes and are not absolute. Again, your risk profile changes depending on how you perceive yourself too.

A senior citizen with no dependents, but with lots of savings, may find it perfectly okay to take on more risk. Similarly, a young person but with many dependents and lots of financial liabilities may be more conservative than other people his age. We have assumed that tax liabilities have been provided for, and the suggested investment break-up is for the net funds available.

Broadly, you can classify investments in to cash and bullion, fixed income instruments, equities and mutual funds. Cash and bullion are taken as one, as both are equally liquid and widely used as a means of savings. Savings would also include funds in your bank savings accounts Apart from pure equities and fixed income instruments, mutual funds are popular investment vehicles.

We have classified mutual funds separately since the risk of investing in funds is relatively lower. Moreover, balanced funds juggle between debt and equity making an all-inclusive classification difficult.

Age : 22-30 years

Profile:

You are single or are married but with no kids. Dependents are not an issue at this stage and your focus is on creating a sizeable corpus of investments for the future. Incomes typically grow at a fast rate annually. The ability to take risk is high and losses in the short term are acceptable. You can invest in equities with a time frame of about 5-6 years which protects you from short-term fluctuations.

Category in %

1. Cash and bullion : 10%
2. Fixed income instruments : 30%
3. Equity shares : 40%
4. Mutual funds-equity growth : 20

-----------------------------------------------------------------

Age : 31-45 years
Profile :
You are now married and your family size has expanded, with two kids. Your parents are now dependent on you for emotional and some financial support. The focus is on consolidating your investments, making them more secure. The ability to take risk is there but to a limited extent. Limiting losses is a priority. Building on a corpus of funds for children’s education becomes a priority now.

Category in %

1. Cash and bullion : 10%
2. Fixed income instruments : 40%
3. Equity shares : 30%
4. Mutual funds-equity growth : 20

---------------------------------------------------------------------

Age : 45-60 years

Profile :

This is the age when retirement blues set in. Children's college and higher education make demands on your funds. You must also ensure that your retirement plans are in place, if you have not done it already. Hence, risk taking ability as a whole diminishes considerably.

Category in %

1. Cash and bullion : 10%
2. Fixed income instruments : 50%
3. Equity shares : 20%
4. Mutual funds-equity growth : 20

------------------------------------------------------------------

Age : Beyond 60

Profile :

You are taking life easy, some introspection, spending time with the family and maybe doing some part time work. Or like some workhorses, you are still engaged as a full time consultant with your ex-employer. The ability to take shocks is extremely limited and you should lower your exposure to equities. Your prime criterion should be to have a higher proportion of fixed income investments and stay liquid to meet any medical emergencies.

Category in %

1. Cash and bullion : 10%
2. Fixed income instruments : 70%
3. Equity shares : 10 %
4. Mutual funds-equity growth : 10%

-----------------------------------------------------------------------

****