Mutual Funds
Sundaram launches hybrid scheme to invest in equities and gold ETFs

Such hybrid funds are in fashion now. They leave investors confused about how to fit such schemes into their asset allocation

Sundaram Mutual has come up with a new fund offer (NFO), the Sundaram Equity Plus, which will put money into equities as well as in gold ETFs. It is an open-end equity scheme. The strategy would be to invest 65%-85% in Equity and equity related instruments listed in India, 15%-35% in Gold ETF and 0-20% in Fixed Income&  Money markets Instruments.

Hybrid schemes that combine equity, gold and fixed income have been the flavour of the whole of last year. Religare Mutual Fund was the first fund house to launch such an asset allocation product in April 2010, with a scheme called Religare Monthly Income Plan (MIP) Plus that would invest in fixed income, gold and equity. Similarly, Canara Robeco launched its own hybrid plan called "Indigo Fund".

These funds claim to offer exposures to different asset classes within the same scheme, especially those that have a low correlation. So if you have a period when equity is not looking bullish, then gold will take care of it. Similarly there are phases when equity would do well and not gold. So, the investor gets to ride different assets in different cycles through the same scheme. At least that is the theory behind these all-in-one schemes.

So does this make sense, and should you go for Sundaram Equity Plus? The question is, where would you place a scheme that divides your money into different assets (gold and equity)? It is not clear to us, how an investor will decide how much to put into a scheme like this, when he already has money invested in gold ETFs and/or equity schemes. Is such a scheme meant for those who have no investment in either equity or gold?

If an investor has investments in equity and not in gold, he could buy some gold ETF. So what specific role does such a scheme perform that existing products cannot? Fund companies do not offer any guide. Indeed, they have little contact with investors, preferring to deal only through distributors whose interest in fund products has been dwindling. Fund companies concentrate on devising products, leaving it to the investor to decide how the new fund will fit into their financial planning. Thus, investors are more confused how to deal with such hybrid schemes.

This fund will be benchmarked against the S&P Nifty for the equity part and prices of gold for the gold portion of the portfolio. The NFO opened on 4 May 2011 and will close on 16 May 2011.

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Centre to sort out telecom industry issues for NTP’11 by August

Telecom minister Kapil Sibal had appealed to the telecom players to sort out their differences but telecom service providers still differ on issues like spectrum pricing and refarming

New Delhi: Union telecom minister Kapil Sibal today said that all industry issues related to the new National Telecom Policy will be sorted out by the month of August, reports PTI.

“By August, we will have all issues decided for the policy.

We are holding a number of round table discussion with industry for this,” Mr Sibal said while speaking at telecom event organised by industry body Associated Chambers of Commerce and Industry (ASSOCHAM).

On its way to finalising the National Telecom Policy 2011, the telecom ministry has come across a number of issues hampering the growth of sector, mainly because of disagreements among telecom players on various issues.

Mr Sibal had earlier appealed to leading telecom companies to sort out their differences for the betterment of the industry. However, telecom service providers still have differences on issues like spectrum pricing and refarming.

Most of the telecom operators have asked the telecom minister to reject the Telecom Regulatory Authority of India’s (TRAI) recommendation on spectrum management and pricing. TRAI’s recommendation is considered to be the foundation for building up the telecom policy.

Telecom companies have even opposed the government’s intention to give preferential access to domestic manufacturers or reserving spectrum for the use of technologies developed indigenously.

“Mandating the use of domestically manufactured products (DMP) is contrary to the NTP (National Telecom Policy), which provides for technology neutrality, flexibility of choice and openness to provide the best of telecom services using state-of-the-art equipment,” Cellular Operators Association of India (COAI) director general Rajan S Mathews has said in a statement.

TRAI has classified domestically manufactured products in two categories—Indian Manufactured Products (IMP) and Indian Products (IP).

The authority defined IMPs as those products in which the intellectual property rights (IPRs) reside outside the country, while Indian Products are those that have IPRs here.

TRAI has recommended that the share of IMPs should gradually go up by 15%, 20%, 25% and 30% in the financial years 2012-13, 2014-15, 2016-17 and 2019-20, respectively. For IP, it has given slabs of 15%, 25%, 35% and 50% in the same set of years.

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SEBI to outsource investor helpline to 3rd-party call centre

Faced with the Herculean task of handling lakhs of investor complaints, SEBI in March last week had decided to outsource such activities to help it resolve the investor complaints on a fast-track basis

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has decided to outsource its investor helpline service to a third-party call centre, where at least 500 agents would be required to attend to investors' calls on issues like initial public offers (IPOs) and trading, reports PTI.

The decision to outsource its investor helpline comes within weeks of SEBI deciding to rope in third-party agencies for processing and maintenance of investor grievances.

Faced with the Herculean task of handling lakhs of investor complaints, SEBI in March last week had decided to outsource such activities to help it resolve the investor complaints on a fast-track basis.

Now, SEBI has decided to empanel a third-party call centre to run its nationwide toll-free investor helpline, where the investors' calls would be initially attended to between 9.30am to 5.30pm on weekdays, an official said.

The timings and hours might be extended further after three months, the official added.

Incidentally, SEBI is in the process of finalising a set of regulations for outsourcing of work by various market intermediaries such as brokers, mutual funds and investment bankers. The regulator is said to be against outsourcing of the market entities' core and investor-sensitive activities.

The investor helpline call centre would be required to attend investors' calls on matters like procedure for lodging complaints, opening of trading accounts, complaint status and assistance in issues like transfer and transmission of shares, IPOs, etc.

Besides, the call centre would also need to provide guidance on status of companies on whether they are unlisted, sick, vanished or delisted and matters pertaining to other regulators that are not under the SEBI purview.

The agency would also require to record and track the calls, inform SEBI about status of processing of calls, but would not provide legal opinions and investment advice.

SEBI wants the call centre agency to have at least five years of experience in BPO business and an authorisation from the telecom ministry for running a call centre.

Besides other necessary infrastructure and experience, SEBI also wants the company to have a minimum of 500-seat operation capacity for one shift and a 1500-seat capacity for three-shift operations, with equal number of call centre agents working on its roll.

SEBI wants the agency to provide the call centre service from Mumbai and provide space for one of its offices in its premises.

On the previously proposed outsourcing of investor grievance processing and maintenance work, the activities to be outsourced by SEBI include receipt of complaints, forwarding them to the concerned market entities and companies, tracking their status and conduct follow-ups.

Besides, the agencies would also be responsible for entry of the complaints into SEBI's computerised grievance redressal system with proper categorisation and codification, updation of the system with Action Taken Reports (ATRs) and keeping investors informed about progress on their complaints.

The market regulator is putting in place this web-based centralised system, named SEBI Complaints Redress System (SCORES), for speedy redressal of grievances.

SEBI's existing investor grievance redressal mechanism lacks a centralised database and the resolution of the complaints often gets delayed due to physical movement of files from one desk to another across its various offices.

Besides reducing time gap between receipt and redressal of a complaint, the new system would also help in storage of the investor grievances, whose numbers have swelled to over 2.7 million since SEBI's inception.

SEBI had received more than 32,300 investor complaints in 2009-10, while the numbers are even higher at over 39,600 in the first nine months of the last fiscal.

The new system would have a centralised tracking system for all grievances at various offices and divisions of SEBI.

Currently, lists of investor grievances are maintained at various divisions and regional offices of SEBI.

SEBI has told the prospective agencies to be empanelled by it for handing investor grievances to dedicate at least 10 skilled persons for the job initially and wants them to have prior experience in handling registrar and transfer activities, depository services or investor matters.

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