This is one more in a long list of foreign funds that are tapping Indian investors’ savings when Indian mutual funds have been unable to sell Indian funds
Deutsche Mutual Fund has announced the launch of DWS Gold and Precious Metal Offshore fund. The investment objective is to generate capital appreciation by investing predominantly in units of DWS Invest Gold & Precious Metals Equities Fund. The scheme would allocate 90-100% of assets in DWS Invest Gold & Precious Metals Equities Fund or other similar overseas mutual fund schemes with medium- to high-risk profile. It would further invest up to 10% of assets in money market instruments with low- to medium- risk profile.
In recent weeks, there has been a rush of foreign funds queuing up to tap Indian savings for foreign products. (Read, 'Another overseas fund from DSP BlackRock, this time it's Chinese'.) DWS is cashing in on the high interest in gold. DSP BlackRock launched DSP Black Rock World Gold fund in August 2007. The fund predominantly invests in units of BlackRock Funds- World Gold Fund. Similarly, AIG launched AIG World Gold fund, in May 2008, which invests in companies engaged in the extraction, processing and marketing of gold through an international fund.
Global funds offer diversification benefits, investing in stocks (biotech, technology, energy, agriculture and mining, etc.) that an Indian investor may not be able to buy through investing in domestic schemes. However, funds that put money in foreign stocks don't necessarily offer diversification. For, markets around the world have been moving in sync over the last five years and non-correlated assets are not easy to find.
As with other kinds of products, foreign funds are not about returns alone. There are risks too. In the case of DWS, there is a risk of concentration in a single volatile sector. The top five holdings of DWS Invest Gold and Precious Metal Equities fund as on 29 April 2011 are Goldcorp, Newcrest Mining, Agnico- Eagle Mines, Newmont Mining and Yamana Gold.
The fund will be benchmarked against S&P BMI Global Gold and Precious Metals index. The scheme will charge a 1% exit load if units are redeemed within 12 months from the date of allotment.
Unfortunately, the S&P BMI Global Gold and Precious Metals index has not performed that well. From 1 May 2006 to 30 April 2011 the Sensex gave an annualised return of 11%, while the S&P BMI Global Index gave an annualised return of 4.01% in the last five years.
Moneylife Foundation urges the PM and others to completely ban MLM companies in India or bring these companies under the regulation of either RBI or SEBI. Moneylife was the first to expose the Speak Asia online survey scam on 8 October 2010
Moneylife Foundation has been writing against multi-level marketing schemes for some time now. Following the exposé by Moneylife on Speak Asia Online Pte Ltd and its multi-level marketing schemes, Moneylife Foundation has sent a representation to prime minister Dr Manmohan Singh, finance minister Pranab Mukherjee, finance secretary Sushama Nath and Reserve Bank of India (RBI) governor D Subbarao urging them to ban all MLM companies and their schemes in the country, or to bring all MLM companies under the regulation of either the RBI or the Securities and Exchange Board of India (SEBI), to stop them ensnaring gullible people.
According to Moneylife Foundation trustees, while the investor population in the country has fallen to 80 lakh, Speak Asia has managed to lure nearly 19 lakh people into its get-rich-quick scheme. The number accounts for a sizeable portion of India's investor population as well as internet users.
Speak Asia requires its members or 'panellists' to deposit Rs11,000 (though the rates vary, as we have seen in the countless posts by agents of Speak Asia on various sites) and then conduct surveys for which the company pays Rs500 per panellist per survey. A panellist gets an added commission if he recruits new members. There is no guarantee as to who will return the money if the company collapses.
It claimed to have conducted surveys for companies like ICICI Bank, Bharti Airtel, Nestle and Bata, but all these institutions have denied their association with Speak Asia. At a press conference held in Mumbai on 16th May, Speak Asia formally apologised for using the names of these companies. But it also refused to name a single client.
Singapore-based Speak Asia was previously known as Haren Technology Pte Ltd and is owned by one Ms Harinder Kaur. The Accounting and Corporate Regulatory Authority (ACRA) of Singapore has given it a non-compliant rating on the ACRA website for not submitting details of its AGM (annual general meeting), annual returns report and other documents.
Haren Technology itself has frequently changed its garb. The company doesn't have a registered address in India. Despite its claims of being the biggest online survey company in Asia, Speak Asia's reach is limited only to India and Bangladesh. It claims to be in existence since 2006, but the website was actually launched only on 21 January 2010.
Speak Asia's tall claims have been busted by Moneylife, and also exposed by The Economic Times, Star News and Aaj Tak. SpeakAsia's panellists have been arrested in Bangladesh. Lot of articles are available online on the fraudulent nature of the company.
Unlike several other countries, MLM schemes are not banned in India. Hence, schemes like City Limousine, Stockguru and GoldQuest could escape with millions. None of the financial watchdogs in India are responsible for monitoring such schemes, so there is every chance that Speak Asia and its clones like Ram Survey and FLC Online can get away after cheating millions of their savings.
Moneylife Foundation hopes that the government recognises the danger such schemes pose and bans them outright, and also put a regulator in charge to monitor such companies and their activities.
The court was hearing a petition filed by NSE seeking directions to the competition watchdog to provide full details and reasons behind the notice which asked as to why penalty should not be imposed on it for allegedly abusing its dominant position
New Delhi: The Delhi High Court today asked the Competition Commission of India (CCI) to give a copy of its order to the National Stock Exchange (NSE) on the basis of which a show-cause notice for penalty was issued to the bourse for allegedly abusing its dominant position, reports PTI.
"The CCI has to furnish the petitioner any order forming the basis of penalty show-cause notice. On principle of natural justice CCI is directed to furnish a copy of order dated 29th April within one week," justice S Muralidhar said.
The court was hearing a petition filed by NSE seeking directions to the competition watchdog to provide full details and reasons behind the notice which asked as to why penalty should not be imposed on it for allegedly abusing its dominant position.
The CCI notice followed its internal investigations after complaint filed by NSE's rival in currency derivative market, Multi Commodities Exchange Stock Exchange (MCX-SX).
The complaint had alleged that NSE substantially reduced transaction fees to eliminate competition and discourage other entities from entering the market.
NSE had moved the high court contending that the notice did not give reasons as to how CCI reached the conclusion of penalty.
After hearing counsels for NSE, CCI and MCX-SX the bench said, "Any material which is going to be used against him (NSE) has to be given to him. It is simple principle of natural justice.
"In arriving to the penalty show-cause notice you had some order. What is the problem? Give NSE a copy of that," the judge said.
CCI's issued the penalty show cause notice after its director general investigation found prima facie that NSE allegedly violated the Competition Act, specifically section 4, which relates to "abuse of dominant position".
CCI had then asked NSE to show cause as to why a penalty should not be imposed on it for unfair trade practices in connection with currency derivatives trading.
It had sent the notice recently to NSE before deciding on the quantum of fine to be imposed on the bourse.
MCX-SX had alleged in its complaint to CCI that NSE used its dominant position and original monopoly in equity, F&O (Future and Options) and WDM (Wholesale Debt Market) markets to protect its position in the currency derivative (CD) market.
Currency futures trading started on the NSE on 29 August 2008, and at the MCX-SX on 7 October 2008.
While MCX-SX is allowed to trade only in currency derivatives, NSE has presence in all major financial trading segments.