Page 13 - Banking Finance September 2023

MUTUAL FUND

related instruments of technology-cen- scheme aims to generate returns that bonds yield about 300-500 basis higher
tric companies. are commensurate with the perfor- than conventional products, like bank
mance of the S&P BSE Sensex Index and deposits and postal savings. The trig-
The minimum application amount is Rs
will ensure that investors' money is al- ger for their growing popularity among
5,000 plus in multiple of Re 1 thereaf-
ways invested in the 30 leading Indian individuals in the highest tax bracket
ter. The minimum application amount
companies. has been the recent changes in the
for SIP is Rs 1,000 and multiple of Re 1.
taxation of debt mutual funds. In an
The scheme will offer regular and direct The performance of the Scheme will be
unexpected move, the government
plans with growth and IDCW options. benchmarked with S&P BSE SENSEX In-
said from April 1 capital gains arising
dex (Total Returns Index). The scheme
from investments made in debt mutual
SBI Funds completes liqui- will be managed by Aditya Mulki and
fund schemes would be added to tax-
Ashutosh Shirwaikar.
dation of assets in Franklin able income and taxed in line with the
With a Total Expense Ratio (TER) of
Templeton MF's six debt 0.14% (direct plan), the Navi S&P BSE income tax slab rate. As a result, the
indexation benefit in debt mutual funds
schemes Sensex Index Fund will have the lowest that lowered the tax outgo for invest-
cost across all Sensex index funds and
SBI Funds Management Ltd said it has ments held for more than three years
active large funds, the fund house said.
completed the liquidation of assets in went.
The average TER of other Sensex index
the six shuttered debt schemes of
funds is 0.22% while that of active large
Franklin Templeton Mutual Fund and
cap funds is 0.9975% (Source: AMFI These 24 mutual funds
distributed Rs 27,508 crore to the
TER data, August 1, 2023).
latter's unitholders. Franklin Templeton multiplied investors’
in April 2020 announced the shutting
wealth by over 2.5x
down of the six debt mutual fund Riskier bonds find takers
Around 24 equity mutual fund
schemes, citing redemption pressures
in new debt mutual fund schemes have multiplied investors’
and lack of liquidity in the bond market.
wealth by approximately 2.5 times in
tax regime
With this, SBI Funds Management has 10 years on investments made through
liquidated 217 securities and disbursed Investors with a higher appetite for SIP, a data analysis by ETMutualFunds
around Rs 27,508 crore which consti- risk are looking to push up returns from showed. In simple words, if an SIP of
tutes 109 per cent of the value of the their fixed income portfolio by betting Rs 1,000 was made in these 24
securities as of the date of winding up - on high-yield bonds. Many of these in- schemes, it would be worth between
- April 23, 2020, the company said in a struments are yielding double-digit re- Rs 3.00 lakh and Rs 4.39 lakh in 10
statement. turns in the range of 10% to 15% de- years. These schemes gave XIRR rang-
pending on the credit profile, but in-
It further said that the liquidation ac- ing between 17.50% and 24.57%. We
vestment advisors warn such papers
tivity was done without creating any looked at the performance of 156 eq-
carry elevated risks that require care-
market dislocation in order to get the uity schemes that have completed 10
ful vetting.
best liquidation value and safeguard the years in the market.
These bonds are mostly offered by non-
interest of the unitholders of Franklin These 24 schemes were from mid cap,
bank finance companies (NBFCs), small
Templeton Mutual Fund (FTMF). small cap, flexi cap, large & mid cap,
finance banks, fintech companies and
contra, ELSS, and multi cap categories.
microfinance lenders among others.
Navi Mutual Fund launches Around nine mid cap, eight small cap,
Their tenure is mostly one to five years
Navi S&P BSE Sensex Index and are available on online platforms two flexi cap, and large & mid cap, one
contra, ELSS, and multi cap schemes
Fund such as Indiabonds, BondsIndia, multiplied investors wealth by approxi-
GoldenPi, Wint Wealth, Bonds Kart,
Navi Mutual Fund has launched Navi mately 2.5 times in 10 years. No large
Grip Invest and Leaf Round.
S&P BSE Sensex Index Fund, an cap, focused fund, and value fund mul-
openended fund that will replicate and For now, these products are trending tiplied investors wealth by approxi-
track the S&P BSE Sensex Index. The among traditional yield-chasers. These mately 2.5 times in 10 years.
BANKING FINANCE | SEPTEMBER | 2023 | 13