myvalueinvest Fund houses line up overseas fund of funds ( contact@myvalueinvest ) :- Two more fund houses seek SEBI nod to launch US based feeder funds. Superior returns delivered by funds investing in US markets has put overseas fund of funds category in the spotlight with many AMCs rushing to launch such funds. Currently there are four US based international feeder funds. Religare Invesco and Kotak Mutual Fund are the latest to join the bandwagon. After partnering with US based investment management firm Invesco, Religare has filed an offer to document with SEBI to launch Religare Invesco US Value Equity Fund. It is awaiting approval for two more international funds - Religare Invesco Global Equity Income Fund and Religare Invesco Asia Consumer Demand Fund. Earlier in August 2013, Axis filed offer documents with SEBI to launch two international feeder funds – Axis Global Equity Alpha Fund and Axis Asian Opportunities Fund. Recently, ICICI Prudential and JP Morgan had come out with their international fund of funds. While JP Morgan’s fund primarily invests in US markets ICICI Prudential’s Global Stable Equity Fund invests in countries like US, Japan, UK, France, Switzerland, among others. Reports of recovery in US coupled with rupee’s depreciation against the dollar has worked wonders for US based feeder funds. The S&P 500 Index is up 24% YTD. Value Research data shows that funds like DSP Black Rock US Flexible Equity, FT India Feeder Franklin US Opportunities Fund, ICICI Prudential US Bluechip Equity Fund have delivered an average of 41% absolute return over a one year period. International feeder funds are meant to provide diversification to investors portfolio. Hence, advisors recommend putting a small portion of investible corpus in such funds. Fresh inflows coupled with mark to market gains have resulted in the assets under management of US based funds going up. DSPBR US Flexible Equity collected Rs. 26 crore from its NFO and now manages Rs. 90 crore. ICICI Prudential US Bluechip Equity Fund mopped around Rs. 55 crore during the launch and its AUM has swelled to Rs. 150 crore. Franklin Templeton’s FT India Feeder Franklin US Opportunities Fund collected Rs 104 crore from its NFO and its AUM is now Rs. 341 crore. But is the party over for these funds? From trading at 68 against the dollar in August the rupee has appreciated to 61 now. Rajesh Chheda of Finance Factory says that investors should maintain their asset allocation irrespective of the fund’s performance. “The rupee is now strengthening so the performance of these funds might get hampered. One should not increase or decrease exposure to funds depending on the performance. Asset allocation should be maintained at all times.” Kavitha Menon, a Mumbai based SEBI registered Investment Adviser says that it is a good idea to invest in developed markets from a diversification perspective. However, she doesn’t recommend putting lump sum money in these funds. “The US markets have rallied and the rupee depreciated so it’s not a surprise that these funds did well. However, now the valuations of Indian markets are looking good. Investors can continue their SIPs in international funds but lump sum investing is not a good idea.”
Posted on: Mon, 21 Oct 2013 06:28:10 +0000
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