Tag: mutual funds

Should you invest in curated investment portfolios?

Personal Finance

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If you are one of those investors who wish to invest directly in stocks/ETFs but don’t have the time or skill to do the required analysis, here is help. You may consider the readymade equity portfolios such as smallcases by Smallcase, Stockbaskets by Samco Securities, One Click Equity by ICICI Direct, Theme Investing by Fyers and Intelligent Advisory Portfolio (IAP) by Motilal Oswal. Here, we look at a few of these products.

How it works

Readymade portfolios are a basket of stocks/ETFs that may reflect a particular investment theme, idea or sector. So, a dividend-yield basket from Smallcase may be made up of stocks that have increased their dividend payout consecutively for the last 10 years and a small-cap basket from Motilal Oswal could have a few stocks of pint-sized firms that are high risk-high return. ICICI Direct provides short term portfolios such as Quant Breakouts 2.0, which is based on quant indicators and F&O (futures and options) data reading. The investing strategies employed to build readymade stock portfolios have been created by SEBI-licenced professionals such as brokers and research analysts, who use fundamental, technical, quantitative models and algorithms.

Few platforms such as Smallcase and Fyers give flexibility to the investors to add/remove stocks or change the weight of the stock. However, baskets by Samco Securities and ICICI One Click does not provide such flexibility for the research-recommended portfolios. Paras Matalia, Head of StockBasket, Samco Securites believes that if flexibility is given to users to deviate from the researched portfolios, it may lead to desired returns.

For example, Motilal Oswal’s IAP on large-cap rebalances the portfolio on a quarterly basis and on corporate governance issues in any company. This will be intimated to the investor through an e-mail or SMS. However, iDirect’s One Click baskets do not undergo rebalancing. Pankaj Pandey, Head Research at ICICI Securities, says that once the target price of the created basket is achieved, the firm recommends an exit from the basket.

To invest in these portfolios, you need a demat account with these platforms. The minimum investment amount may vary depending on the stocks that make up a basket and varies with the prices of constituents in the basket. All the baskets mention the investment strategy, minimum amount and the historical returns of the basket.

Once a basket is chosen, you can invest a lumpsum or run a systematic investment in it.

Smallcase, in addition to providing baskets on its platform, also provides their infrastructure to all leading brokerages including Zerodha, HDFC Securities, Kotak Securities, Axis Direct, Edelweiss and Angel Broking. The smallcases on most of these brokerages are those built by a subsidiary of Smallcase, Windmill Capital; while some brokerages have curated their own in-house smallcases as well.

Costs involved

In case of Smallcase and Fyers, a flat fee of Rs 100 is charged for one smallcase or a theme. Besides, brokerage and other statutory fees are applicable for all orders. The fee is also levied when the portfolio gets rebalanced and the investor chooses to amend the portfolio.

There are certain smallcases created by managers other than Smallcase’s subsidiary – Windmill – such as Weekend Investing, Green Portfolio and Aurum Capital, which charge subscription fee for a specific period that could be either a fixed amount (between Rs 1,200 to Rs 60,000 per year) or a percentage of the investment value (0.25 per cent to 2.5 per cent annually). The pricing varies across the mangers associated with the Smallcase.

In case of StockBasket, the main charge is also research subscription fee in addition to brokerage charges. This would be about 1.2-1.5 per cent of the minimum investment amount. The firm charges a cancellation fee if you exit or cancel the basket before five years. The firm also returns the subscription fee in case the basket fails to make the target corpus for a tenure of 5 years. Motilal Oswal’s products too work on the same basis of subscription fee which depends on the investment advisor. While brokers such as ICICI Direct do not charge any cost for its products – which are created in-house, they charge the applicable brokerage.

Be cautious

When choosing pre-packaged baskets, the returns may include a backtest period. Since most of these baskets have been created only recently , backtested returns are included to show the longer track record (including the period before the inception of the basket).

Mind you, your return from the invested basket could be different from those shown. This will depend on the price and time of your entry and exit. Also, deviations can occur whenever the basket is rebalanced, and you don’t opt for it.

For investors who understand the stock market reasonably well and don’t want to pay for the services of a mutual fund manager, readymade portfolios offer a good alternative. Also, these platforms make investing convenient by automating the process. You also get to follow and invest in portfolios created by some of the famed money managers.

However, if you opt for baskets where you need to pay research subscription fee, compare it with the other similar MF products. Though the choice of portfolio that fits your risk profile and return requirement is left to you.

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Are FinTechs building wealth for Indians?, BFSI News, ET BFSI

Personal Finance

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– By Shashank Singhal

India’s Fintech ecosystem and underlying opportunities have gained global recognition. According to a report by RedSeer Consulting, India’s financial technology companies are expected to triple in value over the next five years, hitting a valuation of USD 150-160 billion by 2025. While digital payments and lending have been critical in the foundation of Indian fintech base however the strong performance of equity and mutual funds led to strengthening and entry of several Wealth management models, with ‘Wealth-tech’. The Indian Wealth-tech market is expected to expand to over $60 billion by FY25.

India currently has 4 million Wealth-tech investors (FY20), which is expected to triple to 12 million by FY25 driven by rising investors, high digital platforms awareness and usage across equity and mutual fund investments, financially literate millennials etc.

The Wealth-Tech Model

Different players are offering different services to investors starting from zero commission plans to customised plans to subscription based modes.

Tarrakki, a wealth management platform enables its customers to subscribe to premium models or invest in zero commission plans directly. Saumya Shah, Founder at Tarrakki said, “Tarrakki pro is a premium model where you get a dedicated financial advisor providing services like financial planning, portfolio creation and asset allocation and assistance at all stages. We also provide equity advisory plans containing model portfolios designed especially for retail investors, selling plans and mutual funds assistant plans.”

Leading player Scripbox believes wealthtech is all about creating, conversing and accumulating wealth. Prateek Mehta, Co-founder & Chief Business Officer at Scripbox describes his business as getting rich slowly. He said, “The Scripbox provides a two-fold advisory model to the customers where they can directly invest in mutual fund plans from several AMCs and above a certain threshold advisory plan opens for customers. Plans and advice are built on customer goals, aspirations, time horizon.”

As digital and smartphone penetration goes deeper across India, access to financial services and markets becomes easier for the underpenetrated segment. Experts believe many people switch to an advisory model or subscription model after burning their fingers after trying it on their own driven by tips and lack of awareness.

Ranjit Sinha, Co-founder of MyWealthGrowth says that the advisory model works on a model portfolio.
He adds, “We have 2 aspects, First; in the back end, the system itself creates a library, under the supervision of analysts. Second; the client interface, where certain questions like age, risk, returns, tenure are asked, and the persona of the person is created and then matched and mapped with the model portfolio. Customers can invest their money in direct plans of mutual funds or purchase a plan where customers get services like financial planning, not only in mutual funds but other avenues.”

Phygital models also exist as not all customer segments are tech savvy, Moneyfront in 2016 was India’s first platform to offer direct plans of mutual funds. Mohit Gang, Founder, Moneyfront said, “We are a “Phygital platform, a unique blend of Digital plus physical assistance model. We offer our client a DIY digital interface for all transactions, reporting, research etc. and then complement it with a fully-engaged service and advisory teams. These teams’ hand-hold and assist the clients in every step of their investing journey and also guide them depending on their unique circumstances.”

Customer Trends and Behaviour

Saumya informed that the average age of Tarrkki’s customer base lies within the range of 30-40. He believes the age of 30-40 is the key to wealthtech as targeting the customers above the age of 50 is not feasible because of limited technical know-how. Also, people get serious about wealth management post 26-27 years of the age. According to Saumya, most of their customers have invested before and require assistance in long term planning and the income bracket of their customers is wide with average investment ranging from 25k-35k rupees to even 2 lakh rupees per month.

Scripbox said most of its customer base reflects the Indian workforce and have a higher share of women customers with average age around 30s where people become serious about wealth management and spread across 2500 cities and towns. Prateek said, “The average amount invested by our customers significantly rises by 5x to 10x compared to the first year. We stress up on the importance of financial awareness and run multiple programmes to improve knowledge and awareness for our customers.”

Ranjith of MyWealthGrowth has presence in top 4 cities but technology has led to expansion to ground level even in the villages. The average of customers falls within the range of 32-38 years. He adds, “Usually, customers invest around 70k-80k rupees in lump sum per month. Customer growth is around 20%-25% YoY, while investment increment growth is high. The average amount invested by our customers rises by 15% to 20% every year. We have been putting efforts in educating investors and providing newsletters, video links, pdfs to our customers on a regular basis.”

Mohit said, “Most of the clients on the platform have international exposure which gives a differentiating edge and hedge to the overall portfolios. We have successfully helped clients route over Rs 3500 crore of investments through our platform and client profile is a mix of all groups with a larger proportion being serious investors in the age group of 30-45.”

Managing Uncertain Times
It is important for people to have an emergency fund in case any uncertainty arises. Earlier, six month emergency funds were considered by many advisors but given how the pandemic has unfolded in the last one year, experts have been recommending investors to double their emergency funds to 12 months.

Saumya said people have become more receptive to advice than before and learnt the importance of asset allocation and emergency fund for adverse times. He said, “We have asked our customers to continue their investment on a long-term horizon with some minor changes and not to time the market. Equities and debt allocation are good options of wealth creation in future. We are aiming to target people within the age group of 25-40 in future by building products like digital gold, P2P lending assets to provide a more diversified experience.”

Prateek of Scripbox explains uncertainty exists in the market but being a young country there is opportunity to grow and the economy will keep growing. Because of the pandemic there is an increase in the importance of emergency funds. People must remain patient, invest for a longer period, and should not try to time the market. “We aim to cater the underserviced in the market in future and build products based on customer needs. Also, tech has helped us to reach masses, scale up our operations and remove human bias.”

According to Singh of MyWealthGrowth the opportunity to create wealth is always there but discipline must be maintained and investments shall be made for a longer horizon. India is still unpenetrated in the investment market and there’s a lot of headroom to grow. He said, “The need for financial planning among people has increased. We aim to grow our prospect base by targeting rural customers. On the product side we are planning to add Digital gold in their portfolio. Use of robo-advisory, algo-trading and technology will continue to rise in the wealth management space in future.”

On how the current times are shaping, Mohit said, “Till the time that global interest rates continue to be low and bond yields remain subdued – the surge could persist. However, one has to be cautious of valuations and be pragmatic while investing. At all points, following a proper asset allocation approach is the right way to navigate these markets.”

Moneyfront is looking to expand its reach in the B2B market and analytics space, Mohit added, “We have partnered with over 4000 partners across smaller towns and cities to enable them to offer financial products digitally to their clients.”



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How to retire early without spoiling family’s dreams

Personal Finance

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Raghavan, aged 49, and Saraswathi, aged 42, wanted to draft their retirement readiness plan. Raghavan, after a busy corporate life, felt it was time to quit and spend time with family. His daughter Anu (18) had just joined college and son Venkat (16) was in ninth standard.

The accompanying table (Assets) shows his net worth.

His investment assets are ₹5.53 crore. Also, he holds 75 sovereigns of physical gold. Raghavan has been a balanced risk taker over the years. He understands the volatility of equity investments and stayed put over the years to generate reasonable returns from his investment portfolio. He has now exited all his direct equity investments and stuck to mutual funds over the years. He has a sound investment portfolio built over the years, with regular investing.

Family history suggested that the life expectancy number for him and his wife would be 100 years. His family has maintained a modest lifestyle with monthly expense of ₹45,000 per month excluding children’s education expenses.

Goals

Firstly, he needs to maintain one-year expenses as emergency fund in fixed deposits.

Secondly, Anu needs ₹6 lakh towards her college education for the next two years, which is to be maintained as fixed deposits/liquid funds. Also, Anu’s PG needs funding.

Anu’s marriage expenses are estimated to be ₹35 lakh. Anu’s gold gift needs will be met from Raghvan’s current holding of physical gold.

Similar planning for Venkat is also required.

The family needs ₹2.7 crore to manage expenses of ₹50,000 per month for a period of 58 years, till Saraswathi attains 100 years of age.Expected return assumed to be at 8 per cent CAGR.

We suggested they add ₹5,000 per month towards any medical need as additional retirement fund. This may be needed to support any prescription costs, medical helper costs over the years.

It was also suggested that Raghavan keep some corpus towards his property maintenance. His independent house may need reconstruction/renovation as the years pass by.

All his goals are seen in the accompanying table.

Final thoughts

Raghavan is very well positioned to opt for immediate retirement with his modest lifestyle. With the current allocation of 49:51 in equity:debt, he can fund most of his goals without any compromise.

We arrived at a total cost of all his goals to be Rs 6.52 crore. His financial assets are worth Rs 5.53 crore. With long-term equity exposure to goals such as retirement health fund, post retirement vacation fund and property maintenance fund, this corpus is sufficient for him to retire immediately.

Mathematically, for a financial planner, saying ‘yes’ to retirement-ready status to a client is easier.

But there are other behavioural aspects to a peaceful and comfortable retirement. Having worked for more than 25 years with dedication, he was prudent and disciplined while saving for retirement. But he never really bothered to spend time with family or enjoy vacations which have become more important for him now.

This is likely to increase spending in the initial years of his retired life. So, it was advised to look out for regular earning opportunity.

This is basically to protect oneself against unexpected change in financial assumptions such as interest rate, inflation and other surprises such as health needs and lifestyle expenses.

When it comes to retirement readiness, it is always better to exceed the planned corpus by substituting with regular income or allocating additional corpus called ‘retirement fall back fund’.

Hence it was advised that Raghvan take logically sound decisions on spending in the first five years post retirement.

The writer, Co-founder of Chamomile Investment Consultants in Chennai, is an investment advisor registered with SEBI

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Sebi deepens fund managers’ skin in the game, BFSI News, ET BFSI

Personal Finance

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Mumbai: Mutual funds will have to pay a part of the salary to its top employees in the form of units of the schemes they oversee. The Securities and Exchange Board of India (Sebi) said on Wednesday at least 20% of the salary, perks, bonus or non- cash compensation of these executives will have to be paid in the form of units of mutual fund schemes.

The regulator said the move is aimed to align the interest of the key employees with the unit holders of the mutual fund schemes. Key officials include a fund house’s chief executive officer, chief investment officer, fund manager, research analysts, chief operation officer among others.

“Having skin in the game is looked at positively by all investors, and the basic intent seems good,” said Kaustubh Belapurkar, Director (Fund Research), Morningstar India.

The new rule comes in the wake of a forensic report commissioned by Sebi which alleged that some of the top officials of Franklin Templeton and their family members withdrew a portion of their investments from some of six stressed schemes of the fund house just before they were shut for redemptions on April 23,2020.

The Sebi circular on Wednesday said units allotted to key employees would be clawed back in the event of “fraud, gross negligence or violation of code of conduct.” The rules become effective on July 1.

The regulator has excluded exchange traded funds, index funds, overnight funds and existing close ended schemes from the new rule.

Sebi said the compensation paid in the form of units should also be proportionate to the assets under management of the schemes in which the key employee has an oversight.

In case of compensation paid in the form of employee stock options, the date of exercising such option should be considered as the date of such payment, Sebi said. The compensation should be locked- in for a minimum period of three years or tenure of the scheme whichever is less.

Mutual fund industry officials are miffed with the new regulations. While some said the move could result in a flight of talent to independent fund management, others said it was unfair on the chief executive officers of mutual funds.

“The CEO will end up putting 20% of his post tax money across a large number of schemes irrespective of his needs, and that too locked in for three years,” said the CEO at a domestic fund house.

The regulator said fund houses should not allow any redemptions of the said units during the lock- in period. Besides, redemptions of such units should also not be allowed within the lock-in period in case of resignation or retirement before attaining the age of superannuation.

“In case of retirement on attaining the superannuation age, such units shall be released from the lock-in and the key employee shall be free to redeem the units, except for the units in close ended schemes where the units shall remain locked in till the tenure of the scheme is over.”

In the case of fund managers managing only a single scheme, 50% of the compensation can be by way of units of the scheme managed by the fund manager and the remaining can could be by way of units of those schemes whose risk value is equivalent or higher than the scheme managed by the fund manager, the circular said.



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Paytm launches ‘Wealth Community’ for young investors

Banking & Finance

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Home-grown digital financial services platform Paytm has launched a new video-based wealth community called the Paytm Wealth Community.

Paytm Wealth Community is an investing community based on video, and “will enable users to attend live sessions conducted by subject matter experts across an array of wealth topics like Stocks, F&O, IPO, ETFs, Mutual Funds, Gold, Fixed Income, and Personal Finance,” the company said in an official release.

“Users will be able to learn from experts, interact with them to clarify doubts, and also chat with other users on the platform to discuss various wealth-related topics,” it said.

The community is meant to tap young users and has been designed for the needs of the “new Indian investor.”

Artificial Intelligence: Financial services industry behind the curve in meeting customer expectations

In beta mode first

“The next 100mn capital market investors in India are expected to originate from social groups and investment communities. Paytm Wealth Community intends to be the leader in helping users save, invest & trade better,” the company said.

The “intuitive” platform will offer live video content on an interactive chat platform. Creators can conduct 30 to 60-minute sessions in multiple languages like Hindi, English, Gujarati and others.

The Paytm Wealth community is owned and operated by OCL Ltd (Paytm) and is initially being offered in beta mode on the Paytm Money platform. It will be offered in beta for select users for the next two months, followed by open access for all.

A limited set of creators have been onboarded by Paytm in beta. In a bid to ensure the safety of retail investors, all creators go through a comprehensive KYC onboarding and all content is recorded/checked, the company said. Over time, users will be able to create custom discussion rooms, set up their creator accounts and chat.

Paytm Money opens new Technology Development Centre in Pune

Community calendar

Varun Sridhar, CEO of Paytm Money, said, “Paytm Money was a natural choice for the Beta launch of Paytm Wealth Community, given our direct access to the broad investment community and reach across India. The Paytm team has implemented cutting edge video & community technology ensuring the platform is seamless, and the user communication is safe and secure. We are very excited by the potential positive impact it will have on how users engage, learn and invest.”

Users who have received access to the Paytm Wealth Community can explore the community calendar, which lists out all upcoming sessions and their details on the Paytm Money app. They can also share sessions on various social media platforms. Other interested users can download or update their Paytm Money app to the latest version and follow Paytm Money on social media platforms to get access to the live session links.

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Perpetual bonds – where do we go from here?

Banking & Finance

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It has been over a month since SEBI announced guidelines for perpetual bonds and almost a month since the valuation of such bonds under the new methodology has been implemented. Before we get into implications of such valuation, lets quickly understand what these bonds are, and how did they actually impact market sentiment.

AT-1 (additional tier 1) bonds are issued predominantly by banks to raise additional Tier 1 capital without any maturity date (perpetual), but they have a call option. Banks issue AT-1 bonds to meet their capital adequacy requirement. Higher capital adequacy norms came into force with the implementation of Basel III guidelines.

These guidelines were formed after the 2008 financial crisis with the collapse of a few banks and financial institutions. Similarly, Basel III Tier 2 bonds issued by banks are expected to provide to their depositors and senior creditors an additional layer of protection.

According to the Basel III guidelines issued by the RBI, Basel III-compliant Tier 2 bonds normally come with a finite maturity.

The regulation

On March 10,SEBI put certain restrictions on investment in these bonds by Mutual Funds – no mutual fund under all its schemes shall own more than 10 per cent of such instruments issued by a single issuer; mutual fund scheme shall not invest (a) more than 10 per cent of its NAV of the debt portfolio of the scheme in such instruments and (b) more than 5 per cent of its NAV of the debt portfolio of the scheme in such instruments issued by a single issuer; and the investments of mutual fund schemes in such instruments in excess of the limits specified may be grandfathered, and such mutual fund schemes shall not make any fresh investment in such instruments until the investment comes below the specified limits. Given that mutual fund ownership of such Tier 1 bonds was around one-third of the total outstanding, it did create some anxiety across the perpetual bond segment.

Yields on such bonds shot up by ~1 per cent. The assumption here was MFs will panic exit such bonds and, hence, bids started inching up.

The volatility in perpetual bond space we saw was largely due to the uncertainty around the impact of valuation methodology. It is important to keep in mind that this in no way was a credit event, but a valuation method change for mutual funds. Since then, the yields have only softened (eased by 50-60 bps) from peak levels as carry chasers stepped in to buy such bonds. Also, we did not see mutual funds undertake panic sales, as the regulator has allowed grandfathering of such exposures.

What’s next?

Markets have now reconciled to business as usual with regard to perpetual bonds. It is important to note that the regulator has not barred MFs from investing in such bonds. Hence, the option remains with MF managers whether or not they would want to own such bonds. All perpetual bonds cannot be categorised as one. Like every debt instrument, perpetual bonds should be evaluated based on the banks fundamentals.

The primary focus remains to evaluate such bonds basis the underlying credit metrics, capital adequacy ratios and systemic importance to the Indian economy. As an investor, one needs to follow the same process in case he/she has exposure to AT1 bonds directly or via mutual funds. The current interest rate scenario may mean adequate liquidity and range-bound interest rates.

In such a scenario, carry yield in fixed income assumes a lot of significance. Such bonds do offer a spread over plain vanilla bonds. The acid test, however, would be to see how the appetite is if banks issue fresh bonds. Also, with valuations now being delinked from call option date, will banks want to continue to hold on to the existing bonds rather than exercising a call option on such bonds?

Markets will get more clarity over next few months as some tier 1 bonds approach their call date. However, market activity in such bonds so far is suggestive of call option being exercised, though it will have to be a wait and watch.

To sum up, AT1 bond offers credit comfort (based on underlying) and reasonable accruals for the investor. In case of MFs, it would best left to the discretion of the portfolio manager to hold the AT1 bonds till call/maturity as per the investment contours of respective schemes. Investors should be aware of the nature of the underlying investment rather than any action based on external noises. After all panic leads to pain, no one really stands to gain.

 

(The writer is CIO – Debt & Head – Products, Kotak Mahindra Asset Management Company. Views expressed are personal and do not reflect the views of Kotak Mahindra Asset Management Company Limited)

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Unfazed by Covid-19, fund raising for public issues jumped by 115% in FY21

Banking & Finance

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Pandemic does not seem to have affected fund mobilisation through capital market as Financial Year 2020-21 (FY 21) saw resources raising through public issue more than doubled. Mutual fund and corporate bond market also registered good growth; a Finance Ministry statement released on Wednesday.

“Despite the uncertainty prevailing in FY 2020-21 owing to Covid-19 pandemic, fund raising in FY 2020-21 was better than that in FY 2019-20 for both Public Issues and Rights Issues,” the statement said.

According to data compiled by the Ministry, fund raising through public issue jumped 115 per cent during FY 21 while growth was 15 per cent for rights issues. Similarly, number of unique investors across different kind of mutual fund grew by 10 per cent, while number of issues in Corporate Bond Market increased by 10 per cent in FY 2020-21.

Mutual funds

Assets under management (AUM) of Mutual Fund Industry increased by 41 per cent to ₹31.43-lakh crore as on March 31 of FY 21 from ₹22.26-lakh crore as on March 31, FY 20. During this period, the number of unique investors across Mutual Fund schemes also increased by 10 per cent to 2.28 crore from 2.08

With increasing expansion of the MF industry in smaller cities, the AUM from below top 30 cities increased by 54 per cent to over ₹5.35 lakh crore from ₹3.48 lakh crore. Investors in Mutual Fund industry may choose to invest in any of the 1,735 mutual fund schemes across categories as per their investment objective as on March 31, 2021.

Corporate bond market

Similarly, around 2003 issues of Corporate Bonds for an amount of over ₹7.82-lakh crore happened in FY 21, surpassing the amount raised (around ₹6.90-lakh crore). While the number of issues increased by 10 per cent during FY 21, the amount raised increased by 13.5 per cent as compared to the previous financial year.

Resource Mobilisation through Public and Rights Issues

(Amount is in Rs. Crore)

Particulars

2019-20

2020-21
 

No.

Amount

No.

Amount

1)Public Issues,

62

21,382.35

56

46,029.71

of which

 

 

 

 

Initial Public Offer (IPO)

60

21,345.11

55

31,029.71

Follow-on Public Offer (FPO)

2

37.24

1

15,000.00

2)Rights Issues

17

55,669.79

21

64,058.61

Total (1+2)

79

77,052.14

77

1,10,088.32

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Franklin Templeton’s Sanjay Sapre, BFSI News, ET BFSI

Personal Finance

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Franklin Templeton Mutual Fund on Friday said its commitment to India remains ‘steadfast’ and the fund house has no plans to exit its operations in the country.

This comes following media reports suggesting intervention by the fund house’s US-headquartered parent seeking the diplomatic route for a “just and fair” hearing by market regulator Sebi in the investigation pertaining to six wound-up debt schemes.

According to the reports, Franklin Templeton had threatened to exit India if it was not given a fair hearing.

In a letter to investors Franklin Templeton Asset Management (India) Pvt Ltd President Sanjay Sapre said, “we have no plans to exit our India business. Any speculation suggesting otherwise, or any rumours around sale of business in India are incorrect and simply that-rumours”.

He reiterated that Franklin Templeton’s commitment to India remains steadfast.

Sapre said that Franklin Templeton was an early entrant in the Indian mutual fund industry and remained a part of the industry even while many other global asset managers decided to leave.

He, however, did not deny reports of engaging with government authorities.

“Our engagement with government authorities, in India and globally, is also something we, and many companies do, as a matter of course. We have endeavored to keep all stakeholders, including the relevant government and diplomatic authorities, appropriately informed of developments, and will continue to do so,” Sapre said.

According to him, the intention in reaching out remains bringing the current matters to an appropriate and satisfactory conclusion.

The fund house said it has full confidence in Securities and Exchange Board of India (Sebi) and all regulatory and statutory authorities.

Franklin Templeton MF said the fund house has been fully transparent with the regulator and extended fullest cooperation to them, to help them examine the circumstances surrounding the winding up of the six schemes by Franklin Templeton last year.

The fund house had closed six of its debt funds in April 2020, citing redemption pressures and lack of liquidity in the bond markets.

These schemes, together having an estimated amount of over Rs 25,000 crore assets under management, were Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund.

Sapre said the fund house’s primary focus over the last several months has been, and remains, on returning money to unit holders as quickly as possible.

In this regard, the fund house said it has directed its efforts to support SBI Funds Management, the liquidator appointed by the Supreme court, in monetizing the portfolios of these schemes and returning monies to investors at the earliest.



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Paytm Money opens technology development centre in Pune

Banking & Finance

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Digital financial services platform Paytm, on Thursday announced that its wholly-owned subsidiary Paytm Money has launched its technology development and innovation centre in Pune.

It also plans to hire over 250 front-end, back-end engineers and data scientists to build new wealth products and services.

A press statement said Paytm Money thrives to simplify investments and wealth creation for retail investors, and the new facility at Pune will focus on driving product innovation, specifically for equity, mutual funds, and digital gold.

Varun Sridhar, CEO – Paytm Money, said in a statement: “We are very excited to launch our Pune tech R&D centre and looking forward to developing new wealth management products and disruptions in Pune. We continue our vision to leverage technology to lower costs for our consumers and provide a solid, innovative and stable platform.”

Also read: Paytm to expand operations in rural areas, smaller towns

He added, “We need solid engineering talent to ensure we meet our ambitions. Pune is famous for its high-quality education and offers a great talent pool along with good infrastructure and great weather. We believe Pune is poised to become an innovation hub for fintech and was a natural choice for Paytm Money’s expansion plans.”

The company has launched a slew of new products and services aimed at empowering seasoned investors as well as new to investment users. It aims to achieve over 10 million users and 75 million yearly transactions in FY21 with the majority of users from small cities and towns.

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