Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 CBDT extends due date for filing Form 10A/10AB for charitable and religious trusts up to June 30
 Tax saving options under New Tax Regime most taxpayers may not be aware of
 Will you save more tax by opting for the old income tax regime?
 You could lose section 80C tax benefit on EPF contribution; here's why
 Income Tax Return Filing: Why you should wait until June 15 to file ITR for FY 2023-24
 Section 43B of Income Tax Act: Expenses businesses can cover apart from payment to MSMEs
 Direct tax collections reflect disparities
 Dealing with income tax notices, intimations or letters? This new feature in ITR portal will make your life easier
 Income Tax Slabs FY 2023-24 & AY 2024-25 (New & Old Regime Tax Rates)
 How can Form 15G & Form 15H save TDS on interest income?
 How are e-filing and e-payment of taxes different? Know details here

MFs gear up for redemption as advance tax date nears
June, 07th 2007

With the date for the payment of advance tax (June 15) nearing, mutual fund (MF) managers are gearing up to tackle redemption pressure mostly from corporate and institutional investors. The fund managers, however, opine that it is a regular phenomena and they are ready to tackle the situation.

Last year, in June 06, MFs witnessed an erosion in their assets under management (AUM) to the tune of Rs 11,089.84 crore or 4.02% of the total AUM of Rs 2.64 lakh crore. The AUM of the MF industry stood at Rs 2.75 lakh crore in May 2006.

Similarly the year before that, in 2005, AUM of June 05 was at Rs 1.64 lakh crore. The AUM had come down by 2.05% or an erosion of Rs 3,443.66 crore from the AUM of May 05, which stood at Rs 1.67 lakh crore.

Optimistic that the similar trend will not be followed this year, Gordon Rodrigues, senior VP and head fixed income HSBC asset management company (AMC) feels that advance tax outflows will not result in much redemptions from the funds as most of the large corporates tend to plan their tax payments through the fixed deposit route, with deposits maturing in line with the tax dates. One does tend to see this more for the second rung corporates, but the amounts are not significant. However, we find that redemption pressure tends to build up substantially in the week prior to the quarter-end as most large banks and financial institutions tend to withdraw their investments for the quarter end date, being a financial disclosure date. They then tend to come back in the week following the quarter end, he said.

Dheeraj Singh, head, fixed income, Sundaram BNP Paribas said, There will definitely be some outflows. However, it will not be like the previous years where there were huge redemptions. Fund managers are now aware of it and are now much better prepared to tackle the first installment of advance tax. Last week, when call money rates fell to 0.1% levels, MFs saw large inflows into their liquid funds from the banking sector, as the return by investing in MFs is far superior than lending into call money market. This also means that once call money tightens and we near the end of the quarter redemption pressure will be even more exaggerated to that extent, said a fund manager.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting