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MF Industry Finds Budget A Mixed Bag

Monday, July 14, 2014
By A Business Reporter

The mutual fund industry welcomed the budget proposal to increase the tax exemption limit under section 80C of the Income Tax Act to Rs. 1.5 lakh, but said other measures were a mixed bag.

“The additional exemption under 80C will provide a limited window for tax exemption eligible mutual fund schemes,” LIC Nomura Mutual Fund’s Anutosh Bose said.

However, for the MF sector, the change in long-term capital gains will impact negatively and the support available to bring in first-time investors towards equity/debt investments will get severely compromised when compared to bank deposits, he warned.

“The increase in the 80C limit enhances tax incentive for potential retail investors to invest into equities mutual fund,” Kotak Mutual Fund’s Sandesh Kirkire said.

“This is a budget that focuses on speed, scale and skill.

Speed in pushing for quick and time bound decisions, and scale in the emphasis on improvement and more importantly expansion of infrastructure across a wider geography,” HSBC Global Asset Management India’s Puneet Chaddha said.

“Plan to reduce the fiscal deficit gradually to 3% is good for economic health. The focus of the Budget has been on increasing manufacturing activity, agri growth and controlling inflation through investment in storage,” Quantum AMC’s Atul Kumar said.

“We expect the revenue growth to be more back ended mirroring the GDP growth. Tilt in the budget is towards investment-led growth which augurs well for sustained economic recovery,” Baroda Pioneer AMC’s Sanjay Chawla said.

“The increase in disposable income and the incentive for savings is a positive,” IDBI Capital’s D C Jain said.

Axis MF’s Chandresh Nigam said domestic savings too got encouragement through expansion of small savings schemes and tax benefits.

Mutual Fund Update
BOI AXA MF changed the exit load structure in 2 schemes

BOI AXA MF has changed the exit load under two schemes, with effect from July 10. The fund house has removed the exit load of BOI AXA Treasury Advantage Fund and revised the exit load of BOI AXA Short Term Income Fund to 0.50% if redeemed within 45 days from the date of allotment.

Kotak MF removes exit load of Kotak Bond Scheme
Kotak MF has removed the exit load of Kotak Bond Scheme. Earlier, there was an exit load of 1% for redemption within 180 days from allotment.

Exit load of Kotak Medium Term Fund changed
Kotak MF has changed the exit load structure under Kotak Medium Term Fund, an open-ended debt scheme with effect from July 14. Accordingly, the exit load will be 2.00% if redeemed or switched out within 18 months from the date of allotment and nil thereafter.

BOI AXA MF announces appointment of key personnel
BOI AXA MF has announced that Piyush Baranwal has been appointed as the fund manager of BOI AXA Equity Debt Rebalancer Fund for debt portion and co-fund manager of BOI AXA Treasury Advantage Fund, with effect from July 11.

Pramerica MF announces change in the fund managers
Pramerica MF has appointed Ritesh Jain as the new fund manager of a number of schemes, namely Pramerica Liquid Fund, Pramerica Ultra Short Term Bond Fund, Pramerica Short Term Income Fund, Pramerica Treasury Advantage Fund, Pramerica Credit Opportunities Fund, Pramerica Dynamic Bond Fund, Pramerica Short Term Floating Rate Fund, Pramerica Income Fund, Pramerica Fixed Duration Fund- Series 6, 7 and 14. He will also manage the debt portion of Pramerica Dynamic Monthly Income Fund, Pramerica Large Cap Equity Fund, Pramerica Dynamic Asset Allocation Fund and Pramerica Mid-cap Opportunities Fund. Earlier, the funds were managed by Mahendra Jajoo. The changes became effective from July 4.

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