'Barring a temporary blip where stocks fell on verdict day, we are back to all-time highs.'
Net investments in active equity mutual fund (MF) schemes rose to Rs 7,300 crore in December after declining to a 21-month low of Rs 2,260 crore in November, shows the latest data from the Association of Mutual Funds in India (Amfi). The rebound in net inflows was driven by a surge in investments and moderation in redemptions. While the inflows into these schemes rose 5 per cent month-on-month (MoM) in December, the redemptions were 14 per cent lower compared to November.
Flow surge in equity schemes is an important reason why Indian stock market did not crash.
Nikunj Saraf, Vice President Choice Wealth, answers your queries.
The previous high was in February this year when investment in the sector rose to Rs 28,784 crore or Rs 287.84 billion.
Last month, the Sahara Group challenged a Supreme Court order which had asked it to refund Rs 24,000 crore (Rs 240 billion) to around three crore (30 million) investors, to a larger bench.
Steep volatility in the markets has made fund managers cautious, awaiting opportunities to deploy the cash.
The improvement in the performance of actively managed mutual fund (MF) schemes is acting as a key tailwind for the nearly Rs 50 trillion industry, Kotak Institutional Equities (KIE) said in a report. The report adds that the two largest listed asset management companies (AMCs) - HDFC and Nippon India - are likely to be the biggest beneficiaries. "The industry has a solid track record of delivering alpha on 10-year returns (70-80 per cent of assets under management (AUM) beat the benchmark), with shorter duration performance also on an upswing.
The mutual fund industry's assets under management (AUM) have likely breached the Rs 50 trillion mark following a rally in domestic equities this month. The industry's average AUM stood at almost Rs 48 trillion at the end of October. In November, the Nifty50 index has gained about 4 per cent so far, while smallcap and midcap indices have rallied close to 8 per cent.
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.
The regulator, at its board meeting on Thursday evening, agreed to the MFs' long-pending demand to incentivise agents for losses suffered due to the abolition of entry charge on investors.
'Those satisfied with returns and not expecting further rally could be booking profits and also stopping SIPs.'
Mutual funds are sitting on a huge cash pile of Rs 22,908 crore (Rs 229.08 billion). The absolute cash levels for all existing equity funds rose by 17.4 per cent to Rs 16,642 crore (Rs 166.42 billion) in February 2008 from Rs 14,176 crore (Rs 141.76 billion), in January 2008. Even the cash as a percentage of the total corpus increased to 8.7 per cent in January 2008, from 7.6 per cent in December 2007. The rising cash levels indicate the cautious outlook of the fund managers.
Foreign portfolio investors' (FPIs') shareholding in NSE-listed companies fell 51 basis points sequentially to 17.68 per cent in the quarter ended March 31, 2024, according to data compiled by PRIME Database. This is the lowest FPI shareholding since December 2012. From the recent peak of 21.21 per cent at the end of December 2020, FPI shareholding is down 353 basis points.
Despite strong AUM growth, MFs lag behind other popular investment avenues. MFs received only 6 per cent of total household savings in 2021-2022.
'Understand how wedding expenses fit into your overall financial situation.' 'Evaluate how different levels of spending will impact other goals like retirement, travel, or housing.'
The Securities and Exchange Board of India (Sebi) has proposed that at least 10 per cent of corporate bond market trades by foreign portfolio investors (FPIs) should be done on the request for quote (RFQ) platform. At present, most trades in the corporate bond market are over-the-counter (OTC), creating a lot of opacity. The markets regulator has been nudging debt market participants such as mutual funds (MFs), alternative investment funds (AIFs) and brokers to use the RFQ platform to boost secondary market liquidity and transparency.
'Young investors with limited funds should ensure that investing in NPS does not crowd out their other, more liquid, investments.'
While there's tax arbitrage advantage in ULIPs now, experts say investors should prefer mutual funds for long-term savings.
Mutual funds (MFs) invested a record Rs 1.73 trillion in equities in the financial year 2022-23 (FY23), providing strong support to the Indian markets at a time when foreign investors were redeeming their holdings. They exceeded the previous high of nearly Rs 1.72 trillion investment in equities in FY22. The data from the Securities and Exchange Board of India (Sebi) shows MFs were net buyers in the equity market in eleven of the twelve months last financial year.
Capital markets regulator Sebi has amended norms to bring buying and selling of mutual fund units under the ambit of insider trading rules. At present, insider trading rules are applicable to dealing in securities of listed companies or those proposed to be listed, when in possession of Unpublished Price Sensitive Information (UPSI). The units of mutual funds are specifically excluded from the definition of securities under the rules.
Monthly SIP inflow is Rs 6,000 crore, with a little over 1.75 million accounts
Markets pose a host of options - insurance, mutual funds, select post office schemes, PPF etc. Where you invest should depend on your needs, says financial planning expert Rahul Goel.
rediffGURU Samkit Maniar answers readers' personal income tax queries.
Domestic investors are tightening their grip on the ownership of listed companies. The gap between the shareholding of domestic institutional investors (DIIs) and foreign portfolio investors (FPIs) narrowed to 13.11 percentage points at the end of the September 2023 quarter. At the peak, the gap was nearly 50 percentage points in March 2015, according to an analysis by Prime Database, a leading provider of data on the capital market.
After a short-term blip, mutual funds (MFs) are back to adding new systematic investment plan (SIP) investors at a record high pace, which was seen during the financial year 2021-22 (FY22). During the first six months (H1) of this financial year (FY24), MFs have added a net 77 million SIP accounts compared to 56 million during the same period of FY23. The net additions this year are a tad higher than the 76.5 million additions in H1 of FY22.
Portfolio management services (PMS), catering to higher networth individuals (HNIs), are facing tough competition from emerging alternative investment funds (AIFs), evident from their dwindling client base. In May, the number of clients for the industry stood at 125,390, down 20,528 in two months, shows data from the Securities and Exchange Board of India (Sebi). "PMS managers also have a high active ratio, which means their portfolios are quite differently positioned and more actively managed, compared to the benchmark, which is also a highlight for long-term investors.
Banks are parking funds not just in securities qualifying for maintenance of statutory liquidity ratio (SLR), but also in mutual funds (MFs).
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
'Indian non-bank lenders stand exposed to a deteriorating credit quality environment.' 'Such a deterioration could put at risk the value of NCDs purchased by the mutual funds and expose investors in bond and liquid funds to a risk of capital loss.'
Half a dozen stocks from the large-cap universe and over two dozen from the mid-cap universe have been replaced.
With the stock coming under pressure, the MF holding value could have dropped to Rs 50 billion, back-of-the-envelope calculations show.
Data shows of the 385 companies, which had announced their latest shareholding, fund houses cut their stake in about 200.
Dept. of Public Enterprises have reminded CPSEs to invest surplus money only in govt-owned MFs.
'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.'
Equity mutual funds (MFs) deployed maximum in shares of Reliance Industries (RIL) in June at Rs 2,177 crore, followed by Maruti Suzuki (Rs 2,045 crore) and Bharti Airtel (Rs 1,310 crore). Shares of both RIL and Bharti Airtel have been turbulent this month. On July 1, shares of RIL crashed over 7 per cent, following the government imposing windfall taxes on domestic crude oil production and fuel exports.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
'Historically, equities have consistently outperformed debt, gold, property, and other assets over a reasonable period.'
We have no idea where the stock markets are headed in the near term. we cater to clients who are inevsting for the long term, for which we have a view, says personal finance expert Rahul Goel.
In a capital protection scheme, fund houses usually invest a hefty chunk (say 80 per cent) of investor money in debt papers, while parking the remaining 20 per cent with equities.
