Mutual Funds
New fund offers of small- and mid-cap mutual funds

L&T Mutual Fund and Birla Sun Life Mutual fund have launched two close-ended equity schemes that will invest in small-cap stocks

With most small- and mid-cap schemes delivering double digit returns over the past year, fund houses seem to be using this opportunity to attract investors. L&T Mutual Fund has a launched a new scheme— L&T Emerging Businesses Fund and Birla Sun Life Mutual Fund has launched a new close-ended equity scheme—Birla Sun Life Emerging Leaders Fund - Series 1. Both are close-ended ended mutual fund schemes investing in small- and mid-cap stocks. With a high allocation to small- and mid-cap stocks, investors should be aware of the risks associated with the scheme, especially since it is a close-ended scheme with no prior track record.
 

Further details of the schemes:
 

L&T Emerging Businesses Fund
 

This is a two year closed-ended equity scheme with automatic conversion into an open-ended equity scheme on completion of two years from the date of allotment. As the name suggests, the scheme would invest in emerging businesses or in other words, small-cap stocks. The scheme will invest at least 50% of the portfolio in small-cap stocks. Small-cap stocks means companies that are beyond top 200 companies based on the market capitalization. The Benchmark for the Scheme is S&P BSE Small Cap Index

As per the asset allocation defined in the scheme information document, the equity scheme will invest 50%-100% of its assets in stocks of small-cap companies. The fund mangers will have the freedom to invest as much as 35% in Indian and foreign equity securities, not necessarily small-cap stocks. The scheme would also have the option to invest up to 35% of its assets in debt and money market instruments.
 

The scheme will be managed by three fund managers. S.N. Lahiri, who has over 21 years of experience and Rajesh Pherwani, who has 16 years of experience will be managing the equity portion of the scheme. Abhijeet Dakshikar, who has 10 years of experience, will be managing the investments in foreign securities.
 

Other details of the scheme
 

NFO Period
 

22 April 2014 to 6 May 2014
 

Application Amount
 

During NFO period:
 

Minimum Initial Application Amount - Rs5,000 per application and in multiples of Re1 thereafter
 

During the 2 year period from the date of allotment:
 

The Units of the Scheme will not be available for subscriptions/switch-in during the initial period of two years. Units may be redeemed on or after the Conversion/Maturity Date.
 

Post Conversion/Maturity Date:
 

Minimum Initial Application Amount- Rs5,000 per application and in multiples of Re1 thereafter
 

Minimum Additional Application Amount - Rs1,000 per application and in multiples of Re1 thereafter
 

Minimum Amount/Number of Units for Redemption - Rs1,000 or 100 Units

 

Expense Ratio (maximum permissible):
 

Maximum total expense ratio (TER) permissible under Regulation 52(6)(c)(i) and (6)(a): 2.50%
 

Additional expenses under Regulation 52 (6A)(c): 0.20%
 

Additional expenses for gross new inflows from specified cities (as mentioned in note II below): 0.30%
 

Exit load
 

For purchases during the NFO period and 2-year period from the date of allotment: NIL

For purchases post conversion/maturity date: If redeemed within one year from the date of allotment or purchase applying First-in First-Out basis: 1% of the applicable NAV

 

Birla Sun Life Emerging Leaders Fund - Series 1
 

It will invest mainly in small- and mid-cap companies. With most small- and mid-cap schemes delivering double digit returns over the past year, fund houses seem to be using this opportunity to attract investors. The scheme, which has a lock-in period of three years, would invest over 80% of it assets in equity stocks, of which, over 70% will be invested in small- and mid-cap stocks and the remaining would be invested in other equities. The scheme would also have the flexibility to invest as much as 20% of its assets in debt and money market investments.
 

For the purposes of this scheme, large caps; mid caps, small caps will be considered as under (as per data available on BSE):
 

Large-cap - Stocks which are ranked as top 100 by market-cap will be termed as large-caps;
 

Mid-caps - Stocks which are ranked 101-200 by market-cap will be termed as mid-caps;
 

Small-caps - Stocks which are ranked 201 & beyond by market-cap will be termed as small-caps
 

The performance of the scheme will be benchmarked to the S&P BSE Midcap Index. Hitesh Zaveri would be the fund manager of the scheme. He has an overall experience of around 10 years in the financial markets.
 

Other details of the scheme
 

NFO Period
 

New Fund Offer Opens: 25 April 2014 | New Fund Offer Closes: 30 April 2014
 

Purchase
 

Minimum of Rs5,000/- and in multiples of Rs10/- there after during the New Fund Offer period.
 

Expense Ratio (maximum permissible):
 

Maximum total expense ratio (TER) permissible under Regulation 52(6)(c)(i) and (6)(a): 2.50%
 

Additional expenses under Regulation 52 (6A)(c): 0.20%
 

Additional expenses for gross new inflows from specified cities (as mentioned in note II below): 0.30%

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EC files complaint against TechM, HCL, Wipro and Voltas for working on poll day

Perhaps the first time, the election authorities have taken action and filed a formal complaint against companies like Tech Mahindra, HCL, Sodexho, Wipro and Voltas for working on poll day

Election authorities from Chennai lodged a police complaint against five companies at an IT park for functioning on the day of Lok Sabha polling in Tamil Nadu on Thursday. The Election Commision says these companies were working in violation of rules and sent back around 2,000 employees home to enable them to vote.

 

Officials said they received complaints from employees of companies like Wipro in an IT park that they had been asked to report for duty despite the provision in law that employers and commercial establishments must grant holiday with wages for their employees on polling day.

 

“When we visited ELCOT IT Park at Sholinganallur, we found that Tech Mahindra, HCL, Sodexho, Wipro and Voltas were working as usual,” Sholinganallur Revenue Inspector R Jayanthi Mala told PTI, adding this was a violation of election rules.

 

As per orders of District Election Officials, Chennai Corporation Commissioner Lakshmi and other executives sealed the buildings, an official release said.

 

Well in advance, the Government declared holiday for polls and requested IT companies to comply. A complaint has been filed with the police seeking action against the companies for flouting government poll norms, Jayanthi Mala said.

 

About 2,000 employees were sent out of the ELCOT premises by officials.

 

“We have told the companies that there should be no more shifts and have locked the campus gate,” she said.

 

This is perhaps the first time, the election authorities have taken action and filed a formal complaint against companies for working on polling day.

 

State Chief Electoral Officer Praveen Kumar had yesterday warned of penal action against those violating the statutory provision giving workers paid leave on poll day.

 

Meanwhile, shops of leading textile retailer — Chennai Silks and jewellery firm Sri Kumaran Thanga Maligai — found operating in Tirunelveli district were sealed by officials, for violation of EC norms.

 

The shops were doing business today as usual despite the EC directive to declare holiday for its employees with pay.

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COMMENTS

Alpesh

3 years ago

What is office is not giving paid leave in Gujarat?

Life Insurance Council admits fraudulent selling affects 3%-5% of customers

Our RTI aplication reveals that while IRDA was about to launch a customer awareness campaign, Life Insurance Council, the mouthpiece of insurers was opposed to the move, even while admitting that fraudulent selling affected 3%-5% of the customers


In February 2014, Insurance Regulatory and Development Authority (IRDA) embarked on a public campaign cautioning people about insurance mis-selling and unfair business practices. Among the malpractices were spurious calls in the name of officials of IRDA, to gain confidence of customers. Besides, there were promises of giving unclaimed bonus or making good for the losses in existing insurance policies, if the customers bough new ones. There has also been a steep rise in fraudulent calls to surrender the existing policy and buy a new one with numerous reasons like product is discontinued or fund performance not doing well, etc.

Fraudulent selling of life insurance– What are IRDA and insurers doing?

A Moneylife Foundation memorandum to IRDA contained many examples of fraudulent selling of life insurance products along with complaints of various categories of mis-selling or unfair business practices.

Life insurance fraud continues with impunity

It is in this context that IRDA issued a public campaign through print, electronic and mass media. However, our RTI application filed with IRDA reveals that shows that the Life Insurance Council, an industry body representing life insurers raised several objection with IRDA’s campaign of cautioning the public. Here are the different issues raised by Life Insurance Council about the proposed IRDA campaign:

1. There is a low likelihood of the message being understood

2. The campaign may end up creating fear amongst consumers. This may be detrimental to the consumer interest at large when communicated through mass media.

3. Message for particular brand (of insurer) combined with messaging from IRDA in the same piece of communication may end confusing the consumer


4. Cost implication of addition of slide with voice over leading to increase in 10-15 seconds time. This would result in scaling down of activities, stoppage in running TV commercials which in turn could result in decline in business for the insurance industry and lesser awareness of insurance products.

5. The severe reduction in advertising in critical high selling months of Feb-Mar 2014 where advertising is at its peak, severe reduction in advertising due to budget impact will directly impact sales of all life insurance companies, which may disadvantage consumers who buy insurance to save tax.

6. Fraudulent selling affects 3%-5% of customers which is not small. However, communication of message in mass media to all customers is likely to raise unnecessary doubts amongst remaining customers, who are not affected by such fraudulent messages.

The Life Insurance Council sought relief from the IRDA circular which was to be effective 1st February. The council requested IRDA to postpone the implementation of the circular till 1st April after the critical selling months till March are over.


But the IRDA did implement the circular effective 1st February. One of IRDA’s important comments to the Life Insurance Council suggestion was as follows – “With the rampancy with which such spurious calls are taking place, a media campaign was a must since even otherwise the confidence on the insurers in proper selling was getting affected.”

Insurers are highlighting spurious calling and false promises through television, radio and cinema to educate public at large.  But, it seems to be done more to comply with IRDA order rather than being genuinely interested in customer interests. To save TV time and costs, the IRDA cautionary message is playing in a superfast mode which makes it impossible to deciper. IRDA’s effort to educate public is probably falling short of its genuine intentions.

Reliance Life’s murky business alliances and practices

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COMMENTS

arun adalja

3 years ago

irda is always favouring insurance companies and they do not about the difficulties faced by insured people.in case of overseas travel insurance companies are not allowing to extend for next 180 days if you have taken claim in first 180 days that means one has to stay overseas without travel insurance.i wrote to irda three times but not bothered to reply.can anybody throw some light on this issue?

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