More and more hybrid schemes are coming out to lure investors. However, these schemes could do more harm than good to the investors
SBI Mutual Fund plans to launch an open ended hybrid fund-SBI EDGE Fund-according to an offer document filed with the Securities and Exchange Board of India (SEBI). The fund will invest in equity, debt and gold ETFs (exchange traded funds)-perhaps the same reason why the fund house has named it EDGE. The fund would invest 10%-60% of its assets in equity and equity-related instruments, a similar allocation would be made towards gold ETFs and 10%-80% in debt and money market instruments. The investment objective of the scheme is to generate growth and regular income, however, with a major portion kept to be invested in gold makes the fund a highly risky investment. The performance of the scheme would be benchmarked against equal weightage of the BSE 100 index, Crisil Composite Bond Fund Index and the price of gold.
With no attraction towards equity, and known the affinity of Indians towards gold, fund houses have started using gold as an asset to attract investors. They are launching gold ETFs and hybrid funds that invest in gold along with debt and equity or a gold savings fund which is a mutual fund which invests in gold ETFs. Axis MF, Kotak MF and Religare MF have all three products and now SBI is following suit.
SBI would be investing as much as 60% in gold, which is too high an allocation to a highly speculative product such as gold. Rajeev Radhakrishnan would be the fund manager. He has a number of funds under his belt-Magnum Insta Cash Fund, SBI Premier Liquid Fund, Magnum Children Benefit Plan, Magnum Income Plus Fund-Saving Plan, SBI Capital Protection Oriented Fund-Series I, Series II & Series III, SBI Short Horizon Debt Fund and the existing Debt Fund Series.
Apart from the risk in gold, investors would be left to the dilemma as to how much to invest in such a fund. With huge variance in asset allocation, how much should an investor invest if he is planning for a particular goal? How much returns is the scheme expected to generate? Fund houses need to come out with schemes that would benefit investors by fitting into a financial plan and not leaving them more confused.
Min Investment: Rs5,000
Additional Investment: Rs1,000
SIP: Minimum amount Rs6,000
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The central bank said any business correspondent authorised by a bank would now be able to offer services like cash transactions to customers of other banks if the lender doesn’t have a branch of the same bank
Mumbai: In a bid to step up financial inclusion, the Reserve Bank of India (RBI) has permitted all business correspondents (BCs) or representative of any one particular bank to conduct business for other banks as well, reports PTI.
The RBI has allowed ‘interoperability’ system at the retail outlets which is the point of customer interface, RBI said in a circular.
Business correspondents are bank representatives who, besides helping rural people to open bank accounts, also facilitate in banking transactions.
The central bank said any business correspondent authorised by a bank would now be able to offer services like cash transactions to customers of other banks if the lender doesn’t have a branch of the same bank.
“Such customer services will have to be a part of the core banking solution (CBS) network of the lenders,” the RBI said, adding it should follow the standard operating procedures which are to be advised by the Indian Banks' Association (IBA).
“The business correspondents or its retail outlet or sub-agent at the point of customer interface would continue to represent the bank, which has appointed them,” it added.
The development would also help government to provide cash subsidy directly to the beneficiary, according to the experts.
The direct transfer of subsidy will help plug any pilferages during government’s money transfers.
The RBI said banks were also advised to strictly adhere to norms on managing risks and code of conduct during outsourcing of financial services, adding banks will be fully responsible for the actions of the business correspondents or sub agents.
Earlier, the RBI has permitted a business correspondent to work in more than one bank but they could provide banking services of only one bank which employed the BC.
Looks like Vedanta’s ‘happiness’ has met with a stumbling block the size of Niyamgiri Hills
The British mining corporation’s Vedanta Resources’ PR campaign has backfired with two Bollywood celebrities pulling out of it. Renowned film maker Shyam Benegal and actress Gul Panag have decided to opt out of a panel which was supposed to judge a number of short films by budding filmmakers which would show the ‘happiness’ the company brings to the villages where the company has its presence.
This is not the first time that Vedanta has run into trouble. Its presence at Niyamgiri in Odisha has drawn severe criticism from Amnesty International, Survival International and Action Aid; who have slammed blatant violation of the rights of the local Dongria Kondh tribes. Bianca Jagger, human rights lawyer and The Rolling Stone’s lead singer Mick Jagger’s former wife has been campaigning against the mining company and in 2010 submitted 30,000 signatures on a petition asking Vedanta to respect human rights. She famously called Vedanta as one of the ‘worst companies’ she came across, which misled the world with a dubious PR campaign.
Vedanta launched its ‘Creating Happiness’ campaign a couple of months ago. Incidentally, the final hearing is coming up in 9th April on Orissa Mining Corporation’s appeal in Supreme Court against the decision to stop mining in the Niyamgiri Hills.
Also, the Sesa Goa-Sterlite merger is on the cards, both the companies being owned by Vedanta Resources. Vedanta will own 58.3% in Sesa Sterlite post-restructuring. It showed a little girl Binno and her village, where Vedanta has supposedly done a lot to promote anaganwadi and mid-day meal initiatives. It is Sterlite which was to start mining bauxite in Odisha.
Filmmakers were asked to make short films for the campaign. However, the campaign drew a lot of criticism. Ms Panag declared on Twitter that she was unaware that the competition was part of Vedanta’s PR initiative, and pulled out. She tweeted, “My bad. Just got full details. I wasn’t aware that the competition was part of Vedanta glorification/PR. Have pulled out.”
The darling of parallel cinema, Shyam Benegal, also reportedly pulled out for similar reasons. Even a filmmaker, has asked for his film to be withdrawn.
Stephen Corry, director of Survival International, an activist group that is opposing Vedanta’s project at Niyamgiri and supporting the tribals, said, “It’s astonishing the lengths Vedanta will go to pursue its goal of mining in the Niyamgiri Hills. Not content with losing its fight against the Dongria Kondh in 2010, it’s now spending millions of dollars trying to change attitudes and convince the world that it’s working in the interests of local communities. The actions of these two jury members speak volumes and set a commendable example.”
Vedanta’s reputation received a severe blow when it ventured to mine aluminium ore in the Niyamgiri Hills of Odisha, and trampled on the rights of the Dongria Kondh tribe to whom the site is sacred. The company planned to go ahead with its plans without addressing environmental or humanitarian concerns, but a popular movement built up which garnered support from all over India. Independent media concerns and activists opposed its presence, the project was stalled.
Several shareholders have sold their shares due to human rights concerns. This includes the Church of England, Joseph Rowntree Charitable Trust, the Marlborough Ethical Fund and Millfield House Foundation. The BP Pension Fund and PGGM (a Pension Fund from the Netherlands) have also divested their shares. The British and Norwegian governments have both condemned the project, and Martin Currie Investments has also disinvested following pressure from Survival.