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.'
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.
'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.'
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
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.
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.
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.
It boosts confidence to investors sitting on the fence.
While selecting a smallcap scheme, go with one that has a good track record and a stable fund manager.
'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.'
rediffGURU Kirtan A Shah answers your personal finance queries.
Decisions should not be based on feelings, such as optimism or pessimism about the stock market or specific investment products, suggests Avinash Luthria.
'Strong regulations are crucial for the orderly development of the market.'
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.
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.
rediffGURU Ulhas Joshi recommends five factors you need to look at to evaluate the performance of two schemes.
Equity fund managers' other favourites are software stocks followed by pharma, finance and consumer non-durables
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
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.
'Midcap and smallcap indices are trading in the expensive zone.'
Since April there have been no new NFOs because of the delay in the implementation of the new norms around pooling of funds.
rediffGURU and financial planning expert Colonel Sanjeev Govila (retd) answers your personal finance-related questions.
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.
The worst may perhaps be over for these stocks, suggests Sanjay Kumar Singh.
Do you have financial planning queries? Ask rediffGURU Anil Rego.
rediffGURU Ulhas Joshi answers your mutual fund queries.
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 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.
Asset Management Companies (AMCs) demonstrated improved business metrics in the first quarter ended June 2023 (Q1FY24), but a sharp run-up in stocks leaves little room for further upside in the immediate term, say analysts. During this quarter, HDFC AMC reported a 10 per cent year-on-year (YoY) rise in revenue from operations at Rs 575 crore. Nippon India's revenue from operations went up 12 per cent to Rs 354 crore.
Amit Gupta, MD, Sag Infotech, answers your personal income tax queries.
Following the money and freezing anything unaccounted is the only way to set an example for others, suggests Debashis Basu.
Markets regulator Sebi on Wednesday ordered attachment of bank accounts as well as share and mutual fund holdings of Rana Kapoor, former MD and CEO of Yes Bank, to recover dues of over Rs 1 crore. The decision has been taken after Kapoor failed to pay the fine imposed on him. Sebi, in September 2020, had levied a fine of Rs 1 crore on Kapoor for not making disclosures regarding a transaction of Morgan Credit, which was an unlisted promoter entity of Yes Bank.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
IDBI Bank had to sell its MF arm after being acquired by state-owned insurance behemoth Life Insurance Corporation since LIC already had an AMC.
Nikunj Saraf, Vice President Choice Wealth, answers your queries.
Here are four main reasons for choosing a mutual fund over trading directly in the market.
