Balanced schemes have not been great performers in the past. Would the new scheme from JP Morgan deliver?
JP Morgan Mutual Fund plans to launch an open-ended balanced scheme—JP Morgan Balanced Fund. Similar to all balanced schemes, the scheme of JP Morgan MF would invest 65%-75% in equity securities and 25%-35% in debt and money market instruments. The performance of the scheme would be benchmarked to the CRISIL Balanced Fund index. The new scheme from JP Morgan MF offers nothing different from the 20-odd balanced schemes available today. Recently Axis MF filed an offer document to launch Axis Dynamic Balanced Fund (Read: Axis Dynamic Balanced Fund: Using hedging strategies could be risky), a scheme that will use hedging strategies to ‘manage’ risk, in order to separate itself from the rest. The only differentiating factor for the JP Morgan scheme is how the fund managers of the scheme would pick stocks. This scheme would be managed by as many as four fund managers, two for the equity portion and two for debt segment.
How has the fund management company performed in the past? JP Morgan currently manages two schemes—JPMorgan India Equity Fund and JPMorgan India Smaller Companies Fund. Both the schemes have performed better than their benchmarks taking a three-year period. Even though the schemes have aged more than five years, they have been able to accumulate a total corpus of just over Rs300 crore. The fund management does not have a long track record of consistent performance.
We have analysed balanced schemes in the past and have found that the way they invest is no different from equity diversified schemes. Balanced schemes of mutual funds look to provide long-term capital appreciation along with current income by investing in a mix of securities in which a major portion is allocated to equity and the rest is in fixed-income instruments such as bonds. Compared to their benchmarks, balanced schemes have not performed too well.
The equity portion of the scheme would be managed by Harshad Patwardhan and Amit Gadgil who have 19 year and 11 years of experience, respectively. The debt segment of the scheme would be managed by Namdev Chougule and Ravi Ratanpal, who have 11 years and nine years of experience, respectively. Whether having four fund managers would ensure benchmark beating returns would be left to be seen. Most balanced fund schemes have at the most two managers and have still found it difficult to beat the benchmark.
Additional Details of the Scheme
Initial Application Amount:
Rs5,000 (per application and in multiples of Re1 thereafter).
Initial Application Amount through SIP:
Six instalments of Rs1,000 each and in multiples of Re1 thereafter.
Additional Application Amount:
Rs1,000 per application and in multiples of Re1 thereafter.
Maximum total expense ratio (TER) permissible under Regulation 52(6)(c)(i) and (6)(a): Up to 2.50%
Additional expenses under regulation 52(6A)(c): Up to 0.20%
Additional expenses for gross new inflows from specified cities: Up to 0.30%
Within and including 18 (eighteen) months from the date of allotment: 1%.
Besides refunding Rs6,398 as purchase price of mobile handsets, Vodafone paid Rs10,000 each as damages for the two handsets in addition to the cost of Rs10,000 to Bhagvanji Raiyani of the Forum for Fast Justice
Mobile operator Vodafone has paid Rs36,398 to Bhagvanji Raiyani, chairman and managing trustee of the Forum for Fast Justice, for selling two faulty mobile handsets following an order from the Maharashtra State Consumer Disputes Redressal Commission. This case would be a revelation not only for customers who are sold faulty handsets but also for sellers.
In 2008, Mr Raiyani bought two mobile handsets from Hutchison Max Paging Pvt Ltd, a dealer of Vodafone for Rs6,398. Both the handsets have the name of Vodafone inscribed and came with a warranty of two years. However, both the handsets were unable to get connected to the Vodafone network and were giving a lot of trouble to Mr Raiyani.
Mr Raiyani requested and also filed a complaint with Hutchison Max and Vodafone for replacing the faulty mobile handsets. However, all his requests turned futile as no response came forward from the respondents.
He then filed a complaint before the District Consumer Forum. During the hearing while Vodafone denied any role as manufacture of the handsets, Hutchison Max contended that it is neither an agent of the mobile operator or vice versa. Both companies stated that there was no relationship whatsoever in transacting any business except in the normal course of business existing between the two.
Relying on the complaint, as there was failure from both Vodafone and Hutchison Max to resolve the issue, the District Forum held them responsible for deficiency in service and passed its order. The District Forum directed Vodafone and Hutchison Max to verify mobile handsets for repairs or refund Rs6,398 in case repair was not possible. In addition, the Forum asked both the companies to pay Rs1,000 each for two handsets and Rs2,000 towards cost to Mr Raiyani.
Mr Raiyani did not accept the amount and appealed before the State Commission.
During the hearing, the lawyer for Vodafone submitted before the Commission that both the companies, Vodafone and Hutchison Max are now merged and Hutchison Max does not exist as a separate entity.
The State Commission noted that, “The liability in respect of rendering efficient and proper service to the complainant does not cease consequent upon merger. The consumer forum passed the impugned order since there was no response from the opponents to the complaints for restoration of smooth service of mobile instruments."
On perusal of records, the Commission said it found no documentary evidence adduced by Mr Raiyani to establish technical fault in the newly purchased handsets. “But it is equally true that no complainant can/or will be in a position to submit such an evidence but will take first step as a prudent consumer to approach and file the complaint with supplier, which the complainant did unfailingly. Therefore, in the instant case, consumer complainant cannot be faulted with as he has taken all precautionary steps as a consumer to lodge complaints and pursue it to the logical conclusion,” the Commission said.
A two-member bench of Dhanraj Khamatkar, presiding member and Narendra Kawde, said, “Both the opponents (Vodafone and Hutchison Max) have miserably failed to deliver effective service to restore the newly purchased handsets to the working position uninterruptedly as can be perused from the record placed before us. We find there is substantive force in the contention of the complainant/appellant as he has been dragged unnecessarily for a small issue to file the consumer complaint and also to pursue the same in appeal.”
The Commission then modified the order of the District Forum. It directed Vodafone to pay Rs10,000 each instead of Rs1,000 as cost of two handsets and Rs10,000 as cost in addition to Rs6,398, the original amount paid for purchase of the mobile handsets to Mr Raiyani.
In the backdrop of police action against Amway, corporate affairs minister Sachin Pilot had stated yesterday that the government is looking to remove the legal ambiguities to differentiate between fraudulent Ponzi schemes and genuine businesses run by “reputed and law-abiding” entities
The Kerala government today ordered a probe into the circumstances that led to the arrest of network marketing firm Amway's Indian chairman and CEO William S Pinckney, an American national.
Kerala minister Thiruvanchoor Radhakrishnan asked the South Zone ADGP Shanker Reddy to conduct an investigation into the circumstances that led to the arrest of Amway chief by the State Crime Branch in connection with fraud cases registered against him.
A team of officials from Amway had met home minister the other day and submitted a complaint about the arrest of their CEO, official sources said today.
In the backdrop of police action against Amway, corporate affairs minister Sachin Pilot had stated in Delhi yesterday that the government is looking to remove the legal ambiguities to differentiate between fraudulent Ponzi schemes and genuine businesses run by "reputed and law-abiding" entities.
"We (corporate affairs ministry) will work closely with concerned ministries and industries to remove the ambiguity in the law (related to tackling Ponzi and other fraudulent schemes) as soon as possible," he had stated.
Pinckney and directors Sanjay Malhotra and Anshu Budhraja were arrested by the Wayanad District Crime Branch (Economic Offences Wing) from Kozhikode on 27th May in connection with three fraud cases registered in Wayanad district.
They were booked under the Prize Chits and Money Circulation Schemes (Banning) Act based on complaints filed by distributors in 2011.
A local court in Wayanad had granted conditional bail to Pinckney and the two company directors the next day of their arrest.
The arrests were based on complaints filed in the Meppady police station by distributors Ashraf and Jaffer in Wayanad district.
The complainants accused the company of failing to ensure the promised benefits to those who joined the network marketing business. They alleged that the company had forced them to buy Amway products which included cosmetics and protein powder for huge sums of money.