Posts Tagged ‘fund managers’

Dividend Payout not the Best Criteria to Judge MFs Schemes

Dividend Payout not the Best Criteria to Judge MFs Schemes

Dividend Payout not the Best Criteria to Judge MFs Schemes

 

Mutual fund schemes generally boast about high dividends but mutual fund experts say picking a mutual fund scheme on the basis of its dividend payout may not be the best way to invest in the sector.

As per MF experts, comparing the quantum of dividends paid in short term is not the correct way to measure a fund’s performance.

The proportion of dividend depends on a number of factors, including the frequency of payouts over a certain period of time.

There are funds that have higher net asset value (NAVs) but lower dividends, while others have lower NAVs, higher dividends.

Moreover, many analysts believes that the consistency of dividend payout is important than the quantum of dividend.

Experts always insist investors to not to base their investment decision on the percentage of dividend paid in a short period.

Rather Investors should look for the track record of the fund in this regard over a longer period of time.

After the recent equity market bull-run, many equity funds have declared dividends up to 70 per cent.

So far in October, over a dozen of equity schemes have declared dividends.

Experts are of view that the quantum of dividend paid does not directly indicate the performance of the fund, especially in the short term.

Unlike equities, if a mutual fund scheme pays certain percentage of dividend, NAV of the scheme drops by the same proportion.
If investors go for dividend plans, they most probably miss the compounding opportunities over the long-term for short-term gains.

An Equity head of a mutual fund said “unlike debt funds, where the intention of an investor is to earn dividends on a regular basis, investors in equity funds,  do not always look for dividend”.

At times, the focus is more on capital appreciation.

Even Fund Managers of reputed firms have maintained quite often that they pay dividends every year irrespective of the market conditions and consistency have always been theirs primary concern not the quantum of dividend.

High Dividends !! Not the Best Way to Judge MF Schemes :)

High Dividends !! Not the Best Way to Judge MF Schemes

High Dividends !! Not the Best Way to Judge MF Schemes


Mutual fund schemes
generally boast about high dividends but mutual fund experts say picking a mutual fund scheme on the basis of its dividend payout may not be the best way to invest in the sector.

🙂

As per MF experts, comparing the quantum of dividends paid in short term is not the correct way to measure a fund’s performance.

The proportion of dividend depends on a number of factors, including the frequency of payouts over a certain period of time.

There are funds that have higher net asset value (NAVs) but lower dividends, while others have lower NAVs, higher dividends.

🙂

Moreover, many analysts believes that the consistency of dividend payout is important than the quantum of dividend.

Experts always insist investors to not to base their investment decision on the percentage of dividend paid in a short period.

Rather Investors should look for the track record of the fund in this regard over a longer period of time.

🙂

After the recent equity market bull-run, many equity funds have declared dividends up to 70 per cent.

So far in October, over a dozen of equity schemes have declared dividends.

Experts are of view that the quantum of dividend paid does not directly indicate the performance of the fund, especially in the short term.

Unlike equities, if a mutual fund scheme pays certain percentage of dividend, NAV of the scheme drops by the same proportion.
If investors go for dividend plans, they most probably miss the compounding opportunities over the long-term for short-term gains.
🙂

An Equity head of a mutual fund said “unlike debt funds, where the intention of an investor is to earn dividends on a regular basis, investors in equity funds,  do not always look for dividend”.

At times, the focus is more on capital appreciation.

Even Fund Managers of reputed firms have maintained quite often that they pay dividends every year irrespective of the market conditions and consistency have always been theirs primary concern not the quantum of dividend.

🙂

PE Funds Raising Plummets to Lowest Levels Since 2003

Private equity fund raising plummets to lowest levels since 2003

Private equity fund raising plummets to lowest levels since 2003

Fund raising by global private equity funds has dipped to an over five-year low of $38 billion in the third quarter of 2009, as fund managers are refraining from making any new commitments before next year.

😦

Fund raising in Q3 of 2009 represents a 55% slump from Q2 of 2009, when the PE funds had raised an aggregate $84 billion globally, according to latest report by a reputed global research firm Preqin.

Private equity fund raising plummets to lowest levels since 2003, with the third quarter figures equivalent to just 45% of the $84 billion raised in Q2 2009.

Many of the funds that are closing are doing so short of target, and a number of fund managers putting their fund raising efforts on hold until 2010, or abandoning them altogether for the foreseeable future.

😦

However, the report noted that the investment shift from the private equity asset class is only short term and the institutional investors would pull back again in the final quarter of this year and in 2010.

🙂

Over the year the number and aggregate fund raising target has dropped considerably.

Reasons can be the slowdown in launches of fund raising programmes, plus an increase in the number of funds being abandoned.

Institutional investors are not making new commitments at anything close to the rate they were in previous years.

The rate of fund raising to drop by nearly 70% over the course of a year is a dramatic fall and demonstrates just how challenging it has become to raise new funds in the current scenario.

😦

Sanlam joined hands with SMC Global, eyeing India fund launch by Feb.

Sanlam joined hands with SMC Global

South African financial services firm Sanlam expects to start mutual fund operations in India by February next year and hopes to break-even in three to five years, a top executive said on Tuesday. 🙂


The firm, which has joined hands with Indian broking firm SMC Global for asset management and wealth management businesses,  has received an in-principal approval from the market regulator and is currently hiring a fund management team.

🙂

“Unless something goes strangely wrong, we are hoping to get operational round about Feb. 1,” said Sanjeev Gupta, chief executive of Sanlam’s emerging market investment unit.


The firm, South Africa’s second-biggest insurer, will join the likes of

Italian bank UniCredit’s arm – Pioneer Global,

South Korea’s Mirae Asset,

France’s Axa and Japan’s Shinsei

These have started operations in India’s fiercely competitive fund industry over the last two years.


The market will become even tougher for fund managers, and particularly hostile to small and new players, as a ban on entry fees charged by mutual funds — to be imposed from Aug. 1 — slows growth and raises distribution costs.

The firm is not hopeful of making money in the initial years as it spends on building brand and strengthening distribution.

“Anytime between the third and the fifth year we feel we will probably turn the tide,” Gupta said.

To start with, the firm plans to tap offshore clients to invest in India-dedicated funds and leverage 1,800 offices of its local partner SMC to attract domestic investors.