“should you dematerialize (demat) your mutual fund...

Mutual Fund Industry Assessment:

The asset size of India’s mutual fund (MF) industry has grown 14% to Rs 13.53 lakh crore in FY16, from Rs 11.88 lakh crore in FY15. In FY16, there was an inflow of Rs. 1,03,288 crore into the Indian mutual fund industry. Equity mutual fund schemes saw the highest-ever inflow from investors at Rs 74,000 crore. Overall, mutual funds witnessed an addition of over 59 lakh investor accounts in the past fiscal, taking the total number of folios to a record 4.76 crore. Of the 59 lakh folios added last fiscal, more than 25 lakh were from small cities.

Despite the 9.4% slump in the BSE Sensex in 2015-16, investors pumped money into equity schemes. Another reason for the flow into the equity segment is a less promising outlook in other traditional avenues of investment, including real estate and gold. 64% of the total AUM was held by debt funds and 30% by equity funds.

April, 2016 Smart investing starts here 1

Ventura Research Desk:

The article for this month, “Should you Dematerialize (demat) your Mutual Fund Units?” explains the advantages and disadvantages of holding mutual fund units in the demat form. Turn to Page 6 for the Top Dividend Paying Equity Mutual Fund Schemes. The top performing equity and debt mutual fund schemes are highlighted on 0 & 11.

Happy Investing!!

Juzer Gabajiwala

“Should you Dematerialize (demat) your Mutual Fund Units?”

Issue - 124 April, 2016

MF POINTER

April, 2016Smart investing starts here2

Market Share of Leading Mutual funds:

The top 5 AMCs continue to dominate the mutual fund industry with a 70% market share while the top 10 AMCs continue to hold 81% (PY 81%) of the market share.

Performance of funds:

Here we present a performance report for various mutual funds, for FY16 in the form of a tabular representation of the percentage of Assets Under Management (AUM) in different categories which have outperformed/underperformed the Nifty. Overall, 75% of the schemes have outperformed the Nifty.

All the debt categories have posted positive returns except one fund each in the Income and Ultra Short term category, which put up a negative performance.

MF POINTER


Fund House Ranking:

Change

HDFC Mutual Fund 10-Dec-99 1,66,719 59,044 1,01,728 5,947

ICICI Prudential Mutual Fund 22-Jun-93 1,66,158 53,439 1,08,538 4,181

Reliance Mutual Fund 24-Feb-95 1,46,770 45,142 96,682 4,946

Birla Sunlife Mutual Fund 5-Sep-94 1,22,483 30,261 88,990 3,232

SBI Mutual Fund 7-Feb-92 1,00,071 34,958 64,581 532

UTI Mutual Fund 14-Nov-02 94,879 34,166 56,988 3,725

Franklin Templeton Mutual Fund 6-Oct-95 65,652 29,758 31,639 4,255

Kotak Mahindra Mutual Fund 5-Aug-94 54,023 13,004 39,052 1,967

IDFC Mutual Fund 20-Nov-99 48,503 9,960 35,896 2,648

DSP BlackRock Mutual Fund 13-May-96 37,613 15,438 19,882 2,292

Axis Mutual Fund 13-Jan-09 33,430 12,333 19,639 1,458

Tata Mutual Fund 15-Mar-94 30,922 8,909 21,337 676

L&T Mutual Fund 25-Apr-96 24,772 9,866 14,556 350

Sundaram Mutual Fund 26-Feb-96 20,619 8,429 11,030 1,160

DHFL Pramerica Mutual Fund 24-Sep-08 18,562 1,050 16,565 946

Religare Invesco Mutual Fund 20-May-05 14,437 1,841 11,866 730

LIC Nomura Mutual Fund Mutual Fund 20-Apr-94 10,295 1,802 8,577 -84

JM Financial Mutual Fund 9-Jun-94 10,268 4,180 5,983 104

Canara Robeco Mutual Fund 2-Mar-93 7,442 3,317 3,583 541

HSBC Global Mutual Fund 12-Dec-01 7,387 1,781 4,529 1,078

Goldman Sachs Mutual Fund 10-Mar-08 6,369 3,719 0 2,650

JPMorgan Mutual Fund 20-Sep-06 5,894 1,749 3,427 719

Motilal Oswal Mutual Fund 14-Nov-08 5,067 4,817 188 61

BNP Paribas Mutual Fund 4-Nov-03 4,954 2,368 2,349 237

Baroda Pioneer Mutual Fund 5-Nov-92 4,199 621 3,551 27

IDBI Mutual Fund 25-Jan-10 4,096 1,257 2,639 201

Principal Pnb Mutual Fund 20-Nov-91 4,068 1,774 2,202 93

Indiabulls Mutual Fund 10-Apr-08 4,025 274 3,103 648

Mirae Asset Mutual Fund 20-Nov-06 3,441 3,055 213 173

Union KBC Mutual Fund 30-Dec-09 2,104 500 1,528 77

Taurus Mutual Fund 27-Jul-93 2,098 313 1,618 167

BOI AXA Mutual Fund 13-Aug-07 1,741 220 1,414 108

Edelweiss Mutual Fund 23-Aug-07 1,660 1,168 222 270

Quantum Mutual Fund 19-Sep-05 698 489 81 129

PPFAS Mutual Fund 8-Aug-11 651 578 0 73

Peerless Mutual Fund 9-Apr-09 642 160 408 75

India Infoline Mutual Fund 22-Mar-10 479 123 280 76

Escorts Mutual Fund 1-Dec-95 261 25 212 24

Sahara Mutual Fund 31-Aug-95 100 46 45 10

Shriram Mutual Fund 27-Jul-94 38 26 10 2

IIFCL Mutual Fund NA NA NA NA NA

IL&FS Mutual Fund NA NA NA NA NA

SREI Mutual Fund NA NA NA NA NA

Equity Debt Others Fund House Name Inception Date Total AUM FY 14-15 FY 15-16

1 1

2 2

3 3

4 4

6 5

5 6

7 7

9 8

8 9

10 10

11 11

12 12

13 13

14 14

32 15

16 16

18 17

21 18

22 19

20 20

19 21

17 22

27 23

24 24

25 25

26 26

23 27

30 28

31 29

28 30

29 31

33 32

34 33

36 34

37 35

35 36

38 37

39 38

40 39

41 40

42 41

43 42

44 43

Fund Rank

*Assets under Management (AUM) as on 31st March, 2016. NA (Data not available on AMFI Website).

Rs. in Cr.

Smart investing starts here4 April, 2016

Markets:

•2016. The barometer index, the S&P BSE Sensex, failed to hold on to the psychological 26,000 mark after regaining that level during the month. At the start of the month, market sentiments were boosted by the India Meteorological Department's (IMD's) forecast of an above-normal monsoon, alongside better than-expected domestic industrial production and consumer price inflation numbers. On the flip side, profit booking and the Bank of Japan's (BoJ's) decision to hold back more stimulus measures dented sentiments.

• The Index of Industrial Production rose 2% in February after remaining negative for three consecutive months and retail inflation measured by the Consumer Price Index (CPI) dropped to a 6-month low of 4.83% in March, reflecting some improvement in the economy and offering further scope to RBI to stay accommodative. The uptick in industrial output was mainly on account of improvement in mining, power and consumer durables.

• The Reserve Bank of India (RBI), in its first bi-monthly monetary policy review for 2016-17, cut the repo rate by 0.25% to 6.5%. In an environment of controlled inflation, the focus was on the repo rate, the rate at which the RBI lends to banks. The yield on the 10-year government bond fell marginally in April to 7.44% from a closing of 7.47% in the previous month.

• According to data released by SEBI, FIIs were net buyers in the equity markets, with total purchases of Rs. 8,416 crore. On the other hand, domestic mutual funds were net sellers in the equity markets, with total sales of Rs. 576 crore during the month of April 2016.

The Sensex and Nifty rose marginally by 1.04% and 1.44%, respectively, in the month of April

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Top 5/Bottom 5

Equity Schemes

Top Performers Under Performers

Annualised Annualised Scheme Name Ret.* % (1Y) Scheme Name Ret.* % (1Y)

DSPBR Technology.com Fund 13.66 GS PSU Bank BeES -28.87

Sundaram-Select Thematic 13.42 LIC Nomura MF Banking &

Funds-Enter Opp Financial Services Fund -16.50

Birla SL New Millennium Fund 12.27 GS Infra BeES -16.05

SBI Small & Midcap Fund 11.45 Sundaram Growth Fund -12.66

ICICI Pru Technology Fund 10.19 HDFC Infrastructure Fund -12.11

Debt Schemes

Top Performers Under Performers

Annualised AnnualisedScheme Name Ret.* % (1Y) Scheme Name Ret.* % (1Y)

ICICI Pru Gilt-Treasury 14.10 JPMorgan India ST Income -9.94

DHFL Pramerica Inflation Indexed 12.99 JPMorgan India Treasury Fund -1.54

Bond Fund

DHFL Pramerica Credit Opp 10.15 JM Income 3.15

Fund

Baroda Pioneer Credit Opp 10.06 IDBI Dynamic Bond 4.77

Fund

L&T Resurgent India Corp Bond 9.87 IDBI Gilt Fund 4.89

Fund

2.171.44 1.40 1.08 1.04 1.00 0.74 0.50 0.50 0.27

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Global Indices Returns: Most global markets went up during the month of April 2016, with Indian indices – the S&P BSE 500 and Nifty 50 gaining the most, i.e. 2.17% and 1.44%, respectively, whereas the Nasdaq and Shanghai Composite fell the most, i.e. 1.94% and 2.18%, respectively.

*Returns as on 29-April-2016

*Returns as on 29-April-2016

MF POINTER


MF POINTER


Vishal, an engineer and a tech-savvy software professional employed with an IT firm, wants to start investing in mutual funds to achieve his financial goals in life. Having heard a lot about the benefits of investing in mutual funds through the SIP route, he decides to start one. Coincidently, he was also approached by his advisor to open a demat account through which he could invest in stocks, mutual funds, etc. This seems like an easy way to invest as it would be faster and there would be less paperwork. Also, it would help him to buy other financial instruments too and give him a consolidated view of his entire portfolio.

As Vishal wants an expert opinion on this matter, he meets a financial planner and asked him a few questions:

1. Is it compulsory to have a demat account to invest in mutual funds?

2. Is there any other convenient & easy way to invest in mutual funds?

3. How will investing through a demat account help in managing my financial life?

4. As a financial expert, what is your recommendation; should I invest physically in mutual fund units or in the demat form?

The financial planner starts answering all the questions one by one. First and foremost, it is not mandatory to have a demat account to invest in mutual funds. There are other ways through which one can invest in mutual funds, which may be convenient depending upon the investor's preference. But investing through a demat account does offer many benefits. The financial planner explains to him the advantages and disadvantages of holding mutual fund units in the demat form:

Advantages:

1. Single, Consolidated View: All your investment holdings are available in one sheet. You can completely bypass the hassle of keeping multiple account statements.

2. Simplicity while changing Bank details, address, etc.: In case of any change in personal or bank details, you would need to update this information in all your investments records. It would involve corresponding separately with each issuing company. If all your investments are in the demat form, all you have to do is update any change at only place, i.e. your demat account.

Should you Dematerialize (demat) your Mutual Fund Units?

Should you Dematerialize (demat) your Mutual Fund Units?

MF POINTER


3. Simple Mode of Holding and Holding pattern: Generally, people hold many investments and hence, are unable to remember their mode of holding or holding pattern. The mode of holding can be different with different fund houses, i.e. Single, Joint, Anyone or Survivor, in the case of units held in the physical form whereas it will be only Single or Joint in case of units held in the demat form.

Also, the holding pattern can be different with different fund houses in the case of units held in physical form. For example, Mr. Joshi as first holder and Mrs. Joshi as the second holder in HDFC Mutual fund and vice-versa in Birla Sunlife Mutual fund. However, the holding pattern will be same in case of units held in a demat account.

4. Seamless and Paperless: It is easy to buy and sell mutual fund units online. It works in just the same way as one transacts in equity shares; there's no paperwork. Paperless transactions mean no hassle or worry of signature mismatches, specifically at the time of redemption.

5. Estate Planning: When all your investments are held in a demat account, it makes the estate planning process simple and convenient, i.e. you only have to mention your demat account number in your will. If investments are in the physical form, you will have to mention each and every detail pertaining to each and every holding.

6. Cost: Some broking houses have started to make Annual Maintenance Charges (AMC) on demat accounts Zero. Earlier, these charges proved to be a disadvantage. Now you can keep mutual funds in the digital form at no additional cost.

MF POINTER


Disadvantages:

1. Multiple/Different Nominees: You can only have one nominee per demat account whereas there is the facility to have more than one nominee for investments held physically. However, there is an amendment expected down the line which could allow multiple nominations to a demat account.

2. Redemption/ Switching: One cannot redeem a specific amount of money in the case of units held in the demat form; a specific number of units must be redeemed. When units are held in the physical form, you can either request a specific amount or redeem a particular number of units.

Further, one cannot switch from one scheme to another even within the same fund house when units are held in the demat form whereas it can done when units held in the physical form.

The Procedure for conversion of Mutual Fund Units into dematerialized form through your Depository Participant (DP):

Obtain a Conversion Request Form (CRF) from your DP.

Fill-up the CRF.

Submit the CRF along with the Statement of Account to your DP.

After due verification, the DP will send the CRF and Statement of Account to the Asset Management Company (AMC) / Registrar and Transfer Agent (RTA).

The AMC / RTA, after due verification, will confirm the conversion request forwarded by the DP and the mutual fund units will be credit in your demat account.

The process takes about 10-15 days to complete.

Conclusion: This is one little step towards simplifying your financial life. Once this is done, it can motivate you to take further steps, which will improve your financial life in the future.

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Debt and Hybrid Funds NAV (Rs.) *Corpus Annualised(%)

(Rs. Crs)# Gr Div 3 mths 6 mths 1 yr

Ultra Short Term Plan

Birla SL Savings Fund 10,202 295.33 100.35

UTI Treasury Advantage Fund 9,317 2,078.31 1,030.29

Liquid Funds

Kotak Floater-ST 5,080 2,498.48 1,005.07

Birla SL Cash Plus 16,192 244.47 102.19

HDFC Liquid Fund 18,979 3,004.13 1,027.18

Crisil Liquid Fund Index 2,521

10.14 8.63 8.96

9.27 8.26 8.78

8.38 8.05 8.24

8.55 8.08 8.22

8.29 7.97 8.17

8.32 7.68 7.97

Debt and Hybrid Funds Corpus

(Rs. Crs)# Gr Div 1 yr 3 yr 5 yr

Income Funds

ICICI Pru Long Term Plan 781 18.16 12.23

Birla SL Medium Term Fund 5,362 18.83 13.96

UTI Dynamic Bond Fund 945 16.97 11.22

Gilt Funds

IDFC G Sec-STP 52 21.97 10.68

SBI Magnum Gilt-LTP 2,243 32.47 12.72

Birla SL Gilt Plus-PF 58 41.14 10.51

Hybrid - Monthly Income Plans(MIPs)

Birla SL MIP II-Wealth 25 1,039 30.62 13.67

SBI Magnum MIP-Floater Plan 77 21.96 14.48

UTI MIS Adv Plan 668 32.64 14.62

Crisil Composite Bond Fund Index 2,564

Crisil MIP Blended Index 3,136

NAV (Rs.) CAGR (%)*

8.18 12.14 11.13

9.82 10.47 10.56

7.58 9.38 9.84

9.11 10.52 8.90

7.19 10.21 10.32

8.02 8.99 10.41

5.90 13.70 11.24

8.20 11.81 10.31

6.56 11.51 9.85

9.04 8.55 8.91

7.15 8.91 8.71

Performing Mutual Fund Plans

*Returns are compounded annualized as on 29th April 2016# Monthly Corpus as on 31st March 2016

MF POINTER


MF POINTER


Performing Mutual Fund Plans

Equity and Hybrid Funds Corpus NAV (Rs.) CAGR (%)

Gr Div 1 yr 3 yrs 5 yrs

Equity - Large Cap

Birla SL Frontline Equity Fund 10,684 158.86 24.12

ICICI Pru Focused BlueChip Eq Fund 9,965 28.38 19.66

SBI Magnum Equity Fund 1,434 73.91 27.49

Equity - Multi Cap

ICICI Pru Value Discovery Fund 11,224 112.20 29.21

Franklin India High Growth Cos Fund 4,155 28.29 21.55

MOSt Focused Multicap 35 Fund 3,294 17.29 17.29

Equity - Mid & Small Cap

DSPBR Micro-Cap Fund 2,352 42.79 25.99

SBI Magnum MidCap Fund 1,614 61.22 28.74

UTI Mid Cap Fund 3,117 78.41 44.77

Equity - Sectoral

UTI Transportation & Logistics Fund 647 86.27 39.78

Franklin Build India Fund 545 28.50 19.33

Tax Saving Scheme(ELSS)

Axis LT Equity Fund 7,818 29.75 19.45

Birla SL Tax Relief '96 2,039 21.47 127.67

Franklin India Taxshield 1,981 422.37 40.03

Balanced Fund

HDFC Balanced Fund 5,282 108.33 26.04

Tata Balanced Fund 5,593 166.15 70.48

SBI Magnum Balanced Fund 4,059 96.17 26.30

Nifty 50 Index 7,850

S&P BSE Sensex 25,607

*

(Rs. Crs)#

0.01 16.87 12.17

-0.80 15.56 11.03

1.60 15.46 10.93

0.04 26.70 17.59

-3.23 26.13 16.88

6.24 - -

9.59 40.58 22.20

9.22 34.36 21.88

2.05 33.73 19.71

2.77 40.65 25.67

-1.30 29.26 19.10

-0.90 26.10 18.86

1.61 23.38 13.88

2.90 21.82 14.72

2.29 20.63 13.93

0.27 19.78 14.63

2.17 19.72 13.64

-4.05 9.80 6.42

-5.20 9.50 5.99

*Returns are compounded annualized as on 29th April 2016# Monthly Corpus as on 31st March 2016

MF POINTER


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This document is solely for private circulation only. Mutual funds like securities investments are subject to market risks and other risks. Investors are advised to read the offer document before investing.

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