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.
Their assets under management (AUM) rose from Rs 1.04 trillion (January 31, 2025) to Rs 1.75 trillion (January 31, 2026), an increase of 68.3 per cent.
Money flowing into the equity schemes of mutual funds is back at a level last seen before the 2008 financial crisis, when the stock market tanked 60 per cent.
Analysts are increasingly optimistic about India's capital markets, with HDFC AMC, CAMS, and KFin Technologies identified as top investment picks. This optimism stems from a structural shift in household savings towards financial instruments and an expected multi-year earnings expansion for market infrastructure providers and asset management companies.
Passive funds appeal to investors seeking to avoid the risk of underperformance by the fund manager and minimise the need for frequent chopping and changing of funds.
Largecap equity funds remain suitable for conservative and moderate risk-taking investors seeking relatively stable returns.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
This product was first introduced by ICICI Prudential Mutual Fund (ICICI Prudential FMP Series 33) and Deutsche Mutual Fund in February. Recently, Birla Sun Life Mutual Fund has also floated a similar fund. The Nifty return, multiplied by the participation ratio (that is pre-decided by the fund) is the final returns. In Aviator, the participation ratio is 140-145 per cent, leading to returns of 43.14-44.5 per cent in our given example.
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.
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
Domestic mutual funds (MFs) and foreign portfolio investors (FPIs) have been net buyers of stocks in August. Domestic fund houses have continued to invest in stocks, propelled by the success of various new fund offers (NFOs) and strong flows into equity funds. MFs had purchased stocks worth more than Rs 8,300 crore until August 23, according to the data provided on the Securities and Exchange Board of India (Sebi) website. Jimmy Patel, MD and CEO at Quantum AMC, says: "The surge in equity investments by MFs is because of two key reasons. One, equity NFOs are getting a strong response from investors, and fund houses need to deploy that money in the markets.
Mid-cap funds have given three-digit returns -- more than those from benchmark and large-cap funds. But, due to the higher risk they entail, you need to tread with care.
'Investing in these funds makes sense if their net yield over better-quality funds -- corporate bond funds or banking and PSU funds -- is meaningful.'
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.
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
Floating-rate mutual funds are back in demand after a year-long period of consistent outflows. In the past three months, investors have poured over Rs 6,100 crore into these debt schemes, indicating a reversal in fortunes for the category that recorded outflows for 11 consecutive months (May 2022 to March 2023), totalling Rs 32,250 crore. Floating-rate funds invest at least 65 per cent in floating-rate instruments, which have their interest rates linked to the Reserve Bank of India repo rate.
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.
Salil Dhawan reveals the MFs that have not only performed well in the past but have a promising outlook for the future too.
Ten Indian states contribute a lion's share of 95% or Rs 12.25 lakh crore.
'They are ideal for short-term financial goals like children's education or a down payment for a house.' 'They are also useful for transitional savings, such as during job switches or while starting a business.'
In a bid to tap the growing potential of mutual fund business in the country, ICICI Bank has decided to raise its stake in Prudential ICICI Asset Management Company to 51 per cent, by buying out six per cent stake from Prudential Plc.
Increasing awareness about mutual funds, ease of transactions through digitisation and sharp surge in equity markets have aided asset management companies to add a staggering 3.17 crore investor accounts in 2021-22, with experts saying the trend is likely to continue this fiscal as well. This was a significant rise from 2020-21 when 81 lakh accounts (or folios in mutual fund parlance) were opened, data with the Association of Mutual Funds in India (Amfi) showed. The ongoing financial year too appears to be promising in terms of folios as increase in investor accounts will enable people to move beyond fixed deposits and savings accounts, said Priti Rathi Gupta, founder of LXME, a financial platform for women.
Reliance Mutual Fund topped the AUM chart with its AUM in excess of Rs 660 billion, while ICICI Prudential Mutual Fund came second with an AUM of Rs 487 billion.
'Allocating 5 to 10 per cent of one's portfolio and staying disciplined through market cycles helps in having a positive investment experience.'
'We operate in an economy that is structurally positioned for long-term growth. As market levels rise over time, our AUM grows in line.'
LIC is one of the largest Indian shareholders in the country's largest car maker, with a 6.93% stake.
While investing in a low priced micro-SIP may seem like a good idea, one must read the fine print before jumping in.
Ask rediffGURU and PF expert Nitin Narkhede your mutual fund and personal finance-related questions.
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.
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
Prudential ICICI Asset Management Company the investment manager to India's largest private sector mutual fund launched an innovative product, the Pru ICICI Advisor Series.
In an online chat with readers on August 10, Vidya Bala, Vidya Bala, head of mutual fund research at FundsIndia, answered their queries. For hose who missed the chat, here is the transcript.
"There is a large workforce working as agents for life insurance companies and other banking and financial products who require specialised training as financial advisers," ICICI Prudential AMC, head -- retail sales and distribution, Vikram Kaushal said. Of the estimated 68,000 financial advisers available in the country, almost 38,000 are working for ICICI Prudential, he said.
PIDP follows a bottom-up stock-picking strategy and prefers to invest in companies that have the potential to compound their cash flows over the years
Largecap companies are generally less vulnerable to economic slowdowns than their mid- and smallcap counterparts.
