Readings: Real estate mutual funds, Capital protection funds, Immoral hazard
- Hindu Business Line: A cautious home-coming for real-estate MFs
Industry watchers said Prudential ICICI, HDFC and Lotus India Mutual Funds could be among the first off the block, given the advantage they enjoy of past experience in real estate, either directly or through their associate companies.
“There is asymmetrical information in real estate so the valuer will have to arrive at a capital value based on a combination of factors, including rentals,” Mr Bagga said.
The REMF guidelines as framed by SEBI provide for something that is in the nature of a balanced fund, said an official with a research firm that tracks the industry.
- Business Standard: Too safe, too short on returns
CPFs are close-ended funds, which were launched in India in October 2006 with the intention of roping in investors, who would like to make small, yet safe returns from the stock market.
However, over the last year, these funds have performed rather dismally, thereby resulting in anguish for the investors. Sample these for numbers: the annual returns of four funds that are available read like this.
Franklin Templeton Capital Safety, three and five year lock-in funds have returned 10.22 and 10.93 per cent respectively.
Given the low returns, fund houses are looking to give investors an exit route in the days to come.
The fancier the product, the worst off you are. And I wonder - who will be the folks rushing to buy this stuff when it lists?
- Via The Big Picture, Jeremy Grantham @ GMO: Immoral Hazard
Greenspan’s book and, even more disgraceful, articles in the Financial Times (and that’s a very high hurdle!), sidestep all blame and admit few errors. His article described housing “as an accident waiting to happen.” Actually it’s brilliant when you think about it: take a distant, almost academic tone and perhaps people will ignore the facts that: first, you allowed the situation to develop; second, did not apparently see it forming (despite 2½ to 3 standard deviation data for housing that suggested a 1 in 80-year event); and third, obliquely or directly blame others. It really is shameful!
. . . despite probable interruptions caused by problems in the developed world, this will lead to emerging markets selling at least at a 50% premium, either quite soon if developed countries hang in, or within 5 years or so if the current problems worsen; This bubble, like all bubbles, will not be justifi ed by longterm value but at least will be one of the least fl aky bubble cases ever;
Grantham rips Greenspan a new one! 
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