Arbitrage funds have recorded net inflows for three months straight, after steep outflows for half a year before that. The trend changed as mutual fund (MF) schemes improved amid a rise in equity market volatility. Investors redeemed over Rs 31,000 crore from arbitrage schemes between June and November before putting in Rs 3,000 crore in the last three months, shows data from the Association of Mutual Funds in India (Amfi).
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Mutual funds (MFs) are betting on a turnaround in the healthcare sector to boost returns but are divided on the prospects of the information technology (IT) sector amid uncertain growth outlook. At the end of June, all of the top 20 fund houses were overweight on the healthcare sector vis--vis the sector's presence in the BSE 200 index, shows a report by Motilal Oswal Financial Services (MOFS). In the case of the IT sector, only six of the 20 fund houses had overweight positions.
Find out whether the fund is equity, debt, or hybrid oriented. 'Understand the portfolio composition and whether it suits your risk appetite and horizon.'
Investors sinking lump sum money in equities seem to have applied the brakes.
Despite strong AUM growth, MFs lag behind other popular investment avenues. MFs received only 6 per cent of total household savings in 2021-2022.
Notwithstanding sharp volatility in March, mutual fund (MF) investors didn't fight shy of investing in riskier small-cap-oriented schemes. Inflows into small-cap funds were not just the highest in absolute terms, they were also the maximum as a proportion of assets under management (AUM) among all market capitalisation (m-cap)-oriented categories. Investors funnelled Rs 2,430 crore down small-cap funds - 1.8 per cent of their AUM of Rs 1.33 trillion.
'Liquid ETFs help in cash management by enabling a smooth transition between equity and cash within the same settlement cycle, as they trade in the same segment as equity.'
'Even where we are now today, the growth rates are very good, but we need to get to 8-9 per cent growth in the years to come.'
A strong appetite for gold on Friday's Dhanteras is expected this year due to auspicious reasons and geopolitical concerns, continuing the 2022 trend driven by pent-up COVID demand. Compared to last year's Dhanteras, gold prices have jumped 22 per cent and silver prices by 21 per cent, respectively. "Gold and silver are good for portfolio diversification, especially in times of geopolitical turbulence.
Chandresh Nigam will join Prudential-ICICI MF in July as senior fund manager (equity), and will report to Dileep Madgavkar, vhief investment officer.
'Especially if their investment horizon is over two years.'
Navi Mutual Fund (MF), among the latest entrants in the Rs 35-trillion industry, is looking to make a mark in the passive investment space, which is gaining traction in the country. The Flipkart co-founder Sachin Bansal-led fund house filed seven offer documents with the market regulator Securities and Exchange Board of India (Sebi) on a single day this week. Some of the schemes Navi MF plans to launch are Navi NASDAQ 100 Fund of Fund, Navi Nifty Commodities Index Fund, Navi Nifty 100 ESG Index Fund.
HDFC Asset Management Company (HDFC AMC) reported a healthy profit after tax (PAT) of Rs 430 crore for the July-September quarter (Q2) of financial year 2023-24 (FY24). It rose 20.2 per cent year-on-year (Y-o-Y) and decreased 8.4 per cent quarter-on-quarter (Q-o-Q). This was driven by good equity returns, leading to a sequential improvement in revenue yields.
Three closed-ended equity schemes have been launched in the past month or so and another is set to open soon for subscription.
Despite the uncertainties created by rising bond yields and oil prices, fund managers have been proactively deploying fresh flows into the equity market. The cash available with equity fund managers, which has remained lower at around 5 per cent in the past few months, hit a 16-month low of 4.8 per cent in September, shows a Motilal Oswal Financial Services report. Cash holdings in equity schemes had topped 6 per cent in February amid subdued equity market sentiment.
Riding the wave of the equity market, the mutual fund (MF) industry experienced double-digit growth in Samvat 2079, concluding the Hindu calendar year close to the Rs 50 trillion assets under management milestone. After a subdued 6 per cent growth in Samvat 2078, the industry's assets surged over 18 per cent last year to Rs 46.7 trillion. Industry players anticipate that Samvat 2080 will also be a fruitful year for the asset management industry, given the strong inflows from retail investors, particularly through the systematic investment plan route.
'Given the inherent volatility, investors should take at least a three to five-year view.'
ICICI Bank, HDFC Bank, Infosys, SBI and L&T among fund managers' preferred bets.
Stocks of public sector undertakings (PSUs) have been on fire in the past year as investors cheered an improvement in key operating metrics and embraced counters of these state-owned enterprises, analysts suggest. The S&P BSE PSU Index has gained over 90 per cent in the past year, rising much higher than the S&P BSE Sensex, which has rose nearly 19 per cent during this period, according to ACE Equity data. The BSE PSU Index, reports show, has delivered a compound annual growth rate (CAGR) of 28 per cent (including dividends reinvestments) over five years and risen by almost 60 per cent in the past year.
'Although mid- and small-cap funds have the potential for higher growth, they come with inherent higher volatility.'
Mutual fund is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.
Wondering if mutual fund investments can help you make you enough money for your retirement and child's marriage? Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
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In the past few years, MFs have emerged as significant institutional buyers, often offsetting the selling by FPIs.
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Swift gains on Dalal Street this year have also led to a sharp surge in shares of equity market intermediaries like depositories, exchanges, and registrar and transfer Agents (RTAs). The stock prices of BSE, CDSL, CAMS, and KFin Technologies are up 24-283 per cent so far in 2023 when compared to a 9 per cent rise in the benchmark Nifty index. With the market buoyancy expected to keep up the pace, analysts believe these stocks are a good long-term bet despite the sharp rally, which can trigger an intermittent correction.
Drop in the number of schemes is less than 3%, despite merger of 38 schemes between Sept 2017 and May this year
These funds can fetch double-digit returns over the long term which debt tax-saving products can't.
The sharp surge in investment accounts (folios) in midcap and smallcap mutual funds (MF) in recent months is likely driven by the do-it-yourself (DIY) investors. In the first five months of the present financial year (FY 2024), net folio additions in direct MF plans (4.5 million) has outpaced that in regular plans (3.9 million), contrary to the trend seen in the previous three six-month periods. The net folio additions in direct plans in the five-month period (April-August 2023) is 40 per cent higher than the total additions made in the previous six month period.
Retail participation in mutual funds from beyond the top 15 cities in the country has increased remarkably in the past 18 months.
'Investors with higher risk appetite and longer horizon (more than one year) can invest in longer-duration funds like corporate bond funds, long-duration funds and gilt funds for maximum gain.'
Mukul K Gupta, CEO, Birla Sun Life Mutual Fund took some time from his busy schedule to address the issues and concerns raised by the investors
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Retail investors seem to have dipped into their mutual fund savings to meet pre-festival spending. According to data released by the Association of Mutual Funds in India (Amfi), investors pulled out Rs 6,578 crore from their systematic investment plan (SIP) accounts in September, the highest in the last 11 months. The redemptions were on the higher side during the previous festive season as well.
The pre-Budget proposals sent to the finance ministry aim to bring uniformity in tax treatment for investments in different financial sectors, mitigate hardship to retail taxpayers, and encourage participation in mutual funds.
'If an investor is ready to stay put for the next five years, one can consider investing in mid- and small-cap funds, but through SIPs.'
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