'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.'
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.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
These funds can fetch double-digit returns over the long term which debt tax-saving products can't.
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.
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.
'Given the inherent volatility, investors should take at least a three to five-year view.'
'The number of first-time investors into MFs can grow four times more than the current rate if we are able to accept the bank KYCs.'
Over the past 25 years the MF industry has come a long way. Geographic reach has increased, many more customers have been added, more channels have been opened up and the product basket is full.
'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.'
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.
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.
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.
rediffGURU Ramalingam Kalirajan answers your personal finance queries.
'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.'
The Securities and Exchange Board of India (Sebi) is discussing with mutual funds (MFs) a proposal on introducing new total expense ratio (TER) slabs linked to the total equity and debt assets by replacing the current ones that are linked to assets of an individual scheme. Senior MF executives confirmed that Sebi had held discussions on this matter with AMCs. Such a change is expected to lead to a lower TER cap for bigger asset management companies (AMCs).
Removal of mark-ups to be paid by Maruti, other changes could raise funding need to Rs 6,000 crore.
rediffGURU Ulhas Joshi answers your mutual fund queries.
Mutual fund (MF) houses have started realigning their overseas product offerings after the Securities and Exchange Board of India (Sebi) advised them to stop subscriptions. PPFAS Asset Management has decided to suspend transactions in Parag Parikh Flexi Cap Fund with effect from February 2, 2022. Though new lump-sum and systematic investment plans (SIPs) will not be accepted, existing SIPs and systematic transfer plans (STPs) will continue.
After pulling out $17 billion in calendar year 2022, foreign portfolio investors (FPIs) have pumped $7.3 billion back into equity markets so far this year. The turnaround in foreign flows has helped domestic markets exceed the all-time highs chalked up in December 2022 and bounced back more than 10 per cent from this year's lows. However, a big nugget of FPI inflows seen this year could be off the back of two factors: exchange-traded funds (ETFs) and block deals.
rediffGURU Ramalingam Kalirajan answers your personal finance queries.
Customers need to weigh whether they will be better off selling their mutual fund holdings or taking a loan against it.
'Small cap funds do have their own merits and they make sense when the investor has a longer investment horizon.'
Indices across Indian equity markets have edged towards new record highs before undergoing a small correction in the past few sessions. The National Stock Exchange Nifty has gained 20 per cent in the past year; mid-caps (up 33 per cent), small-caps (up 31 per cent), and micro-caps (up 44 per cent) have done better. Several factors have precipitated this rally.
rediffGURU Ulhas Joshi answers your mutual fund queries.
Omkeshwar Singh, head, Rank MF, a mutual fund investment platform, answers your queries:
'Midcap and smallcap indices are trading in the expensive zone.'
Equity fund managers' other favourites are software stocks followed by pharma, finance and consumer non-durables
Mutual funds are loading up on information technology (IT) stocks on improved valuations and low downside risk after a double-digit correction in top companies like Infosys and Wipro. IT stocks were MFs' top sectoral buys in April when they invested a net of Rs 2,100 crore. In the first four months of 2023, the net investments in IT amounted to Rs 9,500 crore, shows an analysis by ICICI Securities.
Domestic investors have been increasingly investing in overseas stocks in a bid to diversify their portfolio. US stocks are the favourite for individual investors, though they have been increasingly looking at Chinese equities given the relatively attractive valuations. However, the regulatory crackdown in China and the latest concerns around Evergrande default have resulted in sub-par returns for investors. Edelweiss Greater China Equity Off-shore Fund and Axis Greater China Equity Fund of Fund are down 11 per cent in the past three months, the data from Value Research shows.
Most equity schemes have more than doubled their NAVs in 8 years, even if they entered at the pre-Lehman crisis peak
Omkeshwar Singh, head, Rank MF, a mutual fund investment platform, answers your queries.
Reliance Mutual Fund has collected Rs 1,773.5 crore through the Initial Public Offering for its Equity Opportunities Fund.
Domestic institutional investors (DIIs) may not be net buyers of Indian equities in the near term on lack of inflows and are likely to continue with redemption or sit on sidelines, mutual fund officials said.
rediffGURU Ramalingam Kalirajan answers your personal finance queries.
The Rs 38-trillion mutual fund (MF) industry is going through a new fund offer (NFO) rush. Since July 1, the industry has launched close to 70 NFOs. This follows the completion of a near three-month embargo period when the industry had vowed to not launch any new offerings till the time it implemented norms around pooling of investor accounts. As a result, between April and June 2022, the industry was able to launch just three NFOs.
Do you have financial planning queries? Ask rediffGURU Anil Rego.
In its 59-page order, the capital markets regulator Sebi said that the 10-year restraint period for them would be calculated after taking into account the restraint already undergone by him vide an interim order dated June 17, 2010.
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