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Gross inflows into active equity mutual fund (MF) schemes dipped 34 per cent month-on-month (MoM) -- to Rs 25,400 crore -- in April as investors applied brakes on lump sum investments amid a sharp upwards movement in the market. Gross inflows for March stood at Rs 38,641 crore. The sharp decline pulled the net inflows to a five-month low of Rs 6,480 crore, shows data released by the Association of Mutual Funds in India (Amfi).
An improvement in the liquidity situation is visible as also an increased inflow into mutual funds this month, a top mutual funds industry official said on Wednesday. The apex bank has cut its cash reserve ratio by 3.5 per cent and repo rate by 1.5 per cent since October, thereby considerably easing liquidity pressure in the system.
'We expect the bull-market phase to still persist, but now led by large-caps which offer better valuation and benefit from FII inflows.'
'We expect continued pressure on midcaps, but any sharp correction looks unlikely from here on.'
A committee set up by the Association of Mutual Funds in India had recommended that the existing OD may be split into two parts -- Statement of Additional Information, which will incorporate all statutory information on mutual funds, and Scheme Information Document. However, the schemes which have already received final observations from Sebi can use the old OD format provided they are launched on or before July 31, 2008. But, in this case SID has to be adopted.
The regulator has sought an increase in the investment limit for tax-saving equity mutual fund schemes to Rs 200,000 from the current Rs 150,000.
The Securities and Exchange Board of India (Sebi) is looking at reducing the fees of all mutual fund schemes - equity funds (open- and close-ended), debt funds, index funds and even funds of funds (or FoFs, mutual funds that invest in mutual funds).
As per the revised structure, the ARN fees for NBFCs have seen the biggest decline of 80 per cent to Rs 100,000 (from Rs 500,000 earlier), while fees for proprietary firms have also been slashed considerably from Rs 10,000 to Rs 3,000.
Since March 2020, when the Nifty50 plummeted to 7,511 following the announcement of a nationwide lockdown, the stock market has been on an upward trajectory. Over the next four years, the major market index has delivered a remarkable compounded annual growth rate (CAGR) of over 31.5 per cent. In the past year alone, the Nifty50 has gained by 27 per cent, hitting a succession of record highs.
An improved showing of mutual funds (MFs) is helping the industry attract distribution talent at a brisk pace. The industry has onboarded a net of 11,600 individual distributors in the first seven months of 2023-24 (FY24) compared to just 5,555 distributors in the whole of 2022-23 (FY23), according to data from the Association of Mutual Funds in India. Like most financial products, MFs also have significant reliance on individual distributors to sell their products, even as digital platforms are gaining popularity.
Market watchers believe that the change in guidelines fly in the face of some of the recent initiatives taken by the government, such as easing norms for foreign portfolio investors.
'Historically, equities have consistently outperformed debt, gold, property, and other assets over a reasonable period.'
The Union Budget 2021-22 has made it easier for sovereign wealth funds and pension funds to invest in Indian infrastructure projects, but some of the new rules may need more clarity, experts said. The proposed regime requiring investments through holding companies may have adverse tax implications for such funds and may create an arbitrage between the new and old projects, they said. Besides, the ownership structure of holding companies through which investments are to be made requires further clarification, they added.
The country's six largest smallcap schemes would require more than 20 days to liquidate half of their holdings, despite most of them maintaining high cash levels and having considerable exposure to more liquid largecap stocks, stress tests conducted by fund houses reveal. For midcap funds, the time required to sell half of the assets of the top six schemes varies between seven and 34 days, according to disclosures made by asset management companies. The Securities and Exchange Board of India (Sebi) had called for such tests in the face of strong inflows into smallcap and midcap funds, despite concerns over high valuations, to keep investors better informed.
The SIP route suits the salaried class, by matching their income flows with investment frequency.
Come 2007, individuals as well as corporates investing Rs 50,000 and more in single mutual fund scheme would be required to apply for mutual fund investors number
With this, total inflows have reached Rs 3.98 lakh crore in the first 11 months of the current fiscal (2016-17). In comparison, Rs 2.07 lakh crore was invested in various mutual fund products during April-February period of 2015-16.
While the proposed new tax regime is optional for taxpayers, the finance minister has said the government eventually wants to do away with all exemptions with a lower tax-rate simplified structure.
Investors have pumped in nearly Rs 54,000 crore into various mutual fund schemes in January, with liquid, income and equity funds attracting the most of the inflows.
Some of the money pulled out of mutual funds and the secondary market is coming back via public issues.
'It is the best avenue for investors who would like to take long-term exposure to gold.'
If you want to buy into the stock markets don't wait for tomorrow. The right time to buy stocks is NOW. And here's why...
Mukesh Ambani's Jio Financial Services (JFS) is set to seek shareholders' approval for its leasing subsidiary to acquire telecom equipment and devices worth Rs 36,000 crore ($4.33 billion) from Reliance Retail. Jio Leasing Services Limited (JLSL), a wholly-owned subsidiary of JFS, plans to enter the device leasing business, and the equipment will be deployed in broadband wireless connectivity and other services.
Will allowing business correspondents to hawk insurance products help in reviving 5-lakh strong field agents as a viable channel?
Net investments in active equity mutual fund (MF) schemes rose to Rs 7,300 crore in December after declining to a 21-month low of Rs 2,260 crore in November, shows the latest data from the Association of Mutual Funds in India (Amfi). The rebound in net inflows was driven by a surge in investments and moderation in redemptions. While the inflows into these schemes rose 5 per cent month-on-month (MoM) in December, the redemptions were 14 per cent lower compared to November.
Over 85 per cent of SIP AUM, or Rs 5.8 trillion, is in equity schemes, compared to just Rs 6,100 crore in debt.
The spike in volatility may not have impacted equity inflows, but it has weighed on new investors coming via the systematic investment plan (SIP) route. In May, 1.97 million new SIPs got registered - nearly 15 per cent lower than the previous five-month average of 2.3 million - reveals the data provided by the Association of Mutual Funds in India. Since June 2021, new SIP registrations have been upwards of 2 million each calendar month. The new SIP tally in May was the lowest in 12 months.
With real estate -- NRIs's favourite investment vehicle in the past -- unlikely to do well in the near future, there is a strong case for NRIs to shift to equity and debt mutual funds, says Prateek Mehta.
Due to tax associations with the fiscal-ending, April is a month of SIP renewal. So, the April numbers will be important and may perhaps, mark a change in retail attitude.
Systematic investment plans (SIPs) of mutual funds (MFs) have seen a spike in demand with new registrations touching a five-year high already this year. Around 19.5 million new SIPs have been registered till December end, as against 14.1 million in the whole of financial year 2020-21 (FY21). Market participants say increasing investor awareness and positive experiences have spurred this increase.
The new rule follows the recommendations of the Association of Mutual Funds in India's Working Group on Standardisation of Key Operational Areas, a circular by Sebi said in Mumbai on Tuesday evening.
India's mutual fund industry, led by market leaders Reliance Mutual Fund, ICICI Prudential and UTI MF, has witnessed a fall of over Rs 58,000 crore (Rs 580 billion) in its assets during March.Despite the fall, Reliance MF continued to be the most valued fund house in the country with Assets Under Management (AUM) of Rs 90,937.94 crore (Rs 909.37 billion) at the end of March.
In 2013-14, as many as 45 people each earned more than Rs 1 crore (Rs 10 million) commission as a mutual fund (MF) distributor. This is up from 33 in 2012-13 and 22 in 2011-12.
Bond markets, global as well as domestic, are likely headed towards hard times over the next three to six months, as higher vegetable prices, rising fuel costs, and improved wages may keep inflation hot, believe analysts, who expect the yields to hit 7.5 per cent in the near-term from the current 7.234 per cent. In this backdrop, they suggest investors can put in money in funds/instruments with residual maturity of 4 to 6 years, while longer-term investors can allocate cautiously to the longer end in the range beyond 7 years.
The Mutual Fund Identification Number (MIN), mandatory for investments above Rs 50,000 in mutual funds, is likely to stay, even though the month-old confusion over it continues.
Several exchanges are facing a cash crunch with committed investment not coming from venture capital funds and trading activity seeing a sharp decline, reports Rajesh Bhayani.
