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New funds mop up Rs 2,725 cr in May

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Crisil Marketwire Mumbai
Last Updated : Feb 14 2013 | 10:52 PM IST
Mutual funds raised Rs 2,725 crore through seven new schemes in May. Out of this, six debt schemes raised Rs 1,270 crore, while the only new equity fund floated last moth, StanChart Enterprise Equity Fund, got Rs 1,455 crore.
 
Fixed maturity plans were in the limelight in a weak debt market, with the industry seeing five such schemes.
 
In April, new funds had garnered Rs 6,600 crore, with Rs 5,900 crore being raised only by equity funds. In May, on the debt side, SBI Mutual raised the maximum of Rs 300 crore through its 90-day FMP.
 
Bond yields hardened in May owing to a quarter-basis-point hike in interest rate by the US Fed to 5 per cent, which led to rate hike fears in domestic debt market.
 
An impending hike in domestic fuel prices, which may lead to spike in inflation and in turn interest rates, also weighed on the sentiment.
 
In an uncertain interest rate scenario, fixed maturity plans clearly emerged as winners, as they give an idea about the indicative return by investing in bonds having a maturity profile similar to their own. Like, SBI Mutual's quarterly plan, which has offered an indicative yield of 6.7 per cent.
 
Others to float FMPs were UTI Mutual Fund, ABN AMRO Mutual Fund, and Chola MF. Last month witnessed the launch of Kotak Twin Advantage Fund, a close-ended income scheme that will invest in fixed-duration bonds along with index options and futures.
 
This scheme collected Rs 95 crore.
 
On the equity side, only one close-ended fund from Standard Chartered Mutual Fund was launched. StanChart Enterprise Equity Fund, a three-year close-ended scheme that will invest in initial public offers of companies, raised Rs 1455 crore.
 
Following the revision in Securities and Exchange Board of India norms on initial issue expenses, there has been a slowdown in new equity scheme launches.
 
Sebi permitted only close-ended funds to charge initial issue expenses. Open-ended funds will have to bear sales, marketing and other expenses from the entry load, as they no longer will be allowed to charge initial issues expenses.
 
New fund offerings that closed in May listed according to investment category and the collections, in billion rupees, in the initial subscription period:

 
 

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First Published: Jun 06 2006 | 12:00 AM IST

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