Business cycle funds aim to optimise returns by aligning their portfolios with different phases of the economic cycle. First-time investors, those who prefer stable sector allocations, and those averse to volatility should steer clear of them.
'It's advisable not to go overboard on a banking sector fund or any other sector fund.'
Investors keen on mid and smallcap stocks but wary of volatility should consider multicap equity schemes over standalone midcap or smallcap schemes.
Mutual funds are looking to tap into the special opportunities theme ahead of the results of the general election results and the continued uncertainty on the geo-political and interest rate fronts. Two fund houses - WhiteOak Capital and Samco - are set to launch special opportunities funds next week. Kotak MF has also filed papers with the regulator to launch a scheme in the same category.
Since November 2022, sectoral, midcap, and smallcap funds have collectively added nearly 39 million folios, which is 65 per cent of the total additions to equity funds over the past two years.
Net inflows into two of the 'lower risk' equity funds - largecaps and flexicaps - outpaced the flows into smallcap funds during January 2024 for the first time in 17 months. This is an indication that investors may now be shifting to the relatively safer largecap stocks after a sharp run up in the mid and smallcap spaces. Net inflows into large and flexicap funds were at Rs 3,730 crore last month against Rs 3,260 crore by smallcap schemes.
Ask rediffGURU and PF expert Milind Vadjikar your insurance, stocks, mutual fund and personal finance-related questions.
SBI Mutual Fund recently launched the SBI Quant Fund. Its new fund offer (NFO) opened on December 4, 2024, and will close on December 18, 2024. Currently, 11 fund houses manage quant funds with assets worth Rs 9,013.6 crore.
Passive funds tracking the National Stock Exchange Nifty Next 50 Index have seen their assets under management (AUM) more than double in the past year. The index's growing popularity can be attributed to its robust 50 per cent return over the same period. Currently, the AUM of funds tracking the Nifty Next 50 index stands at nearly Rs 30,000 crore.
rediffGURU Dev Ashish answers your personal finance and mutual fund queries.
Smallcap mutual funds recorded net outflows for the first time in 30 months in March as investors pulled out money after the markets regulator, the Securities and Exchange Board of India (Sebi), warned against "froth" in the mid and smallcap space. Active equity mutual fund (MF) schemes raked in Rs 22,600 crore in March. The March inflow is 16 per cent lower than the two-year high inflow of Rs 26,860 crore in February, shows data from the Association of MFs in India (Amfi).
'Barring a temporary blip where stocks fell on verdict day, we are back to all-time highs.'
Even as net flows into smallcap funds in March turned negative, for the first time in 30 months, they remained a big draw for new investors. The smallcap fund category saw a net of 360,000 investment accounts, or folios, getting added last month, the second-most among all active equity categories. Smallcap funds' continued traction could be driven by their strong performance across timeframes, say experts.
rediffGURU Dev Ashish answers your personal finance and mutual fund queries
'Ideally, one should not time SIPs.' 'If people churn their SIP portfolios, then they are equating the concept of SIPs to lump sums.'
The outflows could be a result of a mix of factors led by the underperformance of some of the larger funds amid elevated return expectations.
'...which is possible through flexicap and multicap funds.' 'The latter has a better balance between large, mid and smallcap stocks.'
A strong influx of 11 equity new fund offers (NFOs) in June, particularly within the thematic space, helped mutual funds collect Rs 14,370 crore - the highest ever via such introductory offers. This surpassed the previous high recorded in July 2021, where four NFOs accumulated Rs 13,709 crore, with ICICI Prudential MF's flexicap NFO alone mobilising Rs 9,808 crore.
'Exposure to small and midcap stocks exceeded desired levels in many portfolios, prompting rebalancing.'
rediffGURU Dev Ashish answers your personal finance and mutual fund queries.
Given gains in equity prices, it is not surprising that the earnings of asset management companies (AMCs) are growing quicker. The earnings momentum looks set to continue. Good fund performances have thus led to AMC earnings upgrades although valuations are high. Recent market performance and net flow trends have led to earnings upgrades by between 3-8 per cent for FY25-27.
Unperturbed by election uncertainty, investors poured record sums into equity mutual fund (MF) schemes in May, driving India closer to a $5 trillion market capitalisation. The Rs 34,697 crore net inflows into actively managed equity funds last month surpassed the previous high of Rs 28,463 crore recorded in March 2022. In April 2024, equity schemes had garnered nearly Rs 19,000 crore.
Ulhas Joshi, Head -- Sales, Rank MF, a mutual fund investment platform, answers your queries.
An allocation to ESG theme funds can bring down the overall risk of an equity portfolio. Investors with long-term financial goals, such as retirement, should not ignore sustainable investing.
'Investors should focus on largecap funds, flexicap funds, business cycle funds, or hybrid-category funds.'
Ulhas Joshi, Head -- Sales, Rank MF, a mutual fund investment platform, answers your queries.
These funds at times invest in companies going through corporate restructuring, such as mergers, demergers, or buybacks.
Active largecap funds, which have the toughest job in terms of outperforming the benchmark, did better in 2023 as their bets in the mid and smallcap stocks paid off.
rediffGURU Ramalingam Kalirajan answers your personal finance queries.
Retail investors now own a larger share of smallcap companies than they did a year ago, thanks to their conviction in mutual fund (MF) schemes focused on this segment. Data from Capitaline shows that MFs' average holding in the National Stock Exchange Nifty Smallcap 250 Index stood at 9 per cent at the end of the October-December quarter of 2023-24 (FY24), up from 7.76 per cent in the same quarter of 2022-23.
rediffGURU Jinal Mehta answers readers' financial planning and health insurance queries
Ulhas Joshi, Head -- Sales, Rank MF, a mutual fund investment platform, answers your queries.
rediffGURU Sunil Lala answers your personal finance-related queries.
Ulhas Joshi, Head -- Sales, Rank MF, a mutual fund investment platform, answers your queries.
rediffGURU Dev Ashish answers your personal finance and mutual fund queries.
The cash pile within smallcap mutual fund (MF) schemes has grown over the past few months amid a relentless rally in stocks in this space. While fund managers usually don't make cash calls, incessant inflows and valuation discomfort have forced their hand. At the end of January, the top 10 schemes had over Rs 12,160 crore in cash, compared to Rs 8,700 crore in August 2023.
The mutual fund (MF) industry had an action-packed 2023 as it tackled the scrapping of tax benefits for debt fund investors and surging flows into equity funds.
Omkeshwar Singh, head, Rank MF, a mutual fund investment platform, answers your queries.
'What will matter in 2024 from the market standpoint is the direction of interest rates globally, as well as in India.' 'The results of the general elections will also be keenly watched.'
While selecting a smallcap scheme, go with one that has a good track record and a stable fund manager.
