The Securities and Exchange Board of India (Sebi) is considering a proposal to allow mutual funds (MFs) to charge a fee based on their performance, said Ananta Barua, whole-time member of the markets regulator. He said the proposal is being reviewed by a working group formed to look into cost structures. "One working group has been set up which is going to review... One of the suggestions is that if any scheme or fund is performing well above the benchmark, it (fee) can be linked to its performance.
rediffGURU Ramalingam Kalirajan answers your personal finance queries.
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.
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.
rediffGURU Dev Ashish answers your personal finance and mutual fund queries.
'Given that debt AIFs, by nature, target a higher portfolio return, it is likely to attract investors like HNIs, family offices, etc, looking for a higher yield debt product.'
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.
It boosts confidence to investors sitting on the fence.
rediffGURU Ramalingam Kalirajan answers your personal finance queries.
'From a risk-return perspective, large-cap funds may generate lower-than-historical average returns in 2024, whereas mid-, and small-cap funds hardly have any upside left.'
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.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
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.
Find out whether the fund is equity, debt, or hybrid oriented. 'Understand the portfolio composition and whether it suits your risk appetite and horizon.'
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.
'Looking at the speed at which changes were made post the Franklin Templeton issue, we are awaiting more stricter norms in the months to come.'
'Strong regulations are crucial for the orderly development of the market.'
Equity fund managers' other favourites are software stocks followed by pharma, finance and consumer non-durables
While selecting a smallcap scheme, go with one that has a good track record and a stable fund manager.
rediffGURU Kirtan A Shah answers your personal finance queries.
Foreign portfolio investors (FPIs) and mutual funds (MFs) have put in more money as anchor investors in initial public offerings (IPOs) in 2021 than any other year. FPIs' share of investments for the year stood at Rs 24,477 crore, nearly six times that put in last year and more than nine times the amount invested in 2019, the data from Prime Database showed. MFs have invested Rs 12,264 crore, four times than that invested last year and more than 10 times the investment in 2019. The total investment by FPIs and MFs put together this year is five times the amount invested last year. The amount contributed by MFs, however, is nearly half of that invested by FPIs.
Decisions should not be based on feelings, such as optimism or pessimism about the stock market or specific investment products, suggests Avinash Luthria.
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.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
rediffGURU Ulhas Joshi recommends five factors you need to look at to evaluate the performance of two schemes.
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.
The worst may perhaps be over for these stocks, suggests Sanjay Kumar Singh.
Since April there have been no new NFOs because of the delay in the implementation of the new norms around pooling of funds.
The Securities and Exchange Board of India (Sebi) has directed Franklin Templeton MF to pay Rs 5 crore as penalty, return over Rs 450 crore collected as 22-month investment management and advisory fees, and imposed a two-year ban on launching new debt schemes for alleged irregularities in running six of its debt schemes that were shuttered last year.
'Midcap and smallcap indices are trading in the expensive zone.'
Omkeshwar Singh, head, Rank MF, a mutual fund investment platform, answers your queries:
The amount of money Indians invested in foreign securities, property, and deposits in 2022 was likely the highest on record. At $2.1 billion, it was the largest spend for any 12-month period according to the Reserve Bank of India's (RBI's) data going back over a decade. The amount spent for each individual segment was also the highest.
rediffGURU and financial planning expert Colonel Sanjeev Govila (retd) answers your personal finance-related questions.
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rediffGURU Ulhas Joshi answers your mutual fund queries.
Mutual funds (MFs) have lined up information technology (IT) funds, indicating that technology stocks are back on fund managers' radar after a hiatus. Over the past 18 months, stock prices for companies in the software space have either corrected or remained subdued. Fund houses have launched five IT-based sectoral funds in the past three months, with three of them taking the passive route.
rediffGURU Ulhas Joshi answers your mutual fund queries.
Here are four main reasons for choosing a mutual fund over trading directly in the market.
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