Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
For the first time in a decade, inflows into equity mutual funds (MFs) decoupled from the past performance of the equity market, as investors continued to pour money into the market unperturbed by lacklustre returns.
Sustaining positive momentum for the 14th straight month, equity mutual funds attracted a net sum of Rs 15,890 crore in April amid heightened volatility in stock market and consistent selling by foreign portfolio investors. This was much lower compared to a record net inflow of Rs 28,463 crore seen in the preceding month, data from the Association of Mutual Funds in India (AMFI) showed on Tuesday. The lower quantum of net inflow from the previous month could be attributed to investors going slightly cautious given the ongoing challenges to the investment environment, Himanshu Srivastava, associate director - manager research, Morningstar India, said.
A buoyant equity market, coupled with an improved performance of mutual funds (MFs) on the returns chart, has heightened retail investors' appetite for equities. In the past few months, equity MF schemes have seen a surge in fresh investments through both lump sum (one-time investments) and systematic investment plan (SIP) routes. During the August-September 2023 period, equity MF schemes recorded net lump sum investments of Rs 35,270 crore, compared to just Rs 5,550 crore in the previous three months, according to data from the Association of Mutual Funds in India (Amfi).
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
Mutual funds have reverted to a strong buying spree in the stock market, but returns for investors might be capped as this renewed vigour coincides with shares already having turned somewhat expensive, the analysts feel.
Fund houses have conducted investor camps and awareness programmes in more than 400 cities. Also, the popular 'Mutual fund sahi hai' campaign has helped bring in a lot of new investors into the MF fold from underpenetrated regions.
Retail investors now own a bigger slice of smallcap companies than at the start of 2023-24 (FY24), underscoring their growing conviction about investing in this red-hot space. Data from Capitaline shows mutual funds' (MFs') average holding in the National Stock Exchange Nifty Smallcap 250 rising to 9.26 per cent from 8.67 per cent during the first six months of FY24, with the number of companies with over 20 per cent MF holdings increasing from 24 to 28. In comparison, MF holdings in Nifty50 companies have gone up only marginally, from 9.67 per cent to 9.75 per cent.
'Investors with higher risk appetite and longer horizon (more than one year) can invest in longer-duration funds like corporate bond funds, long-duration funds and gilt funds for maximum gain.'
Hybrid mutual fund (MF) offers, expected to drive higher investor interest after the change in debt fund taxation, are set to end 2023 with the slowest account growth in the past three years. Investment accounts in hybrid funds are up 5.7 per cent so far in 2023 compared with 7.6 per cent in 2022 and 20 per cent in 2021, shows the data from the Association of Mutual Funds in India (Amfi). In 2020, the count had dipped 2.4 per cent.
Wondering if mutual fund investments can help you make you enough money for your retirement and child's marriage? Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
'Banks will continue to increase FD rates to attract more deposits and meet the increasing demand for credit.'
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
Fund houses' tie-ups with the postal department for marketing their schemes through post offices are yet to take off in a bigger way.
Of the Rs 13,957.4 crore (Rs 139.57 billion) lying with the existing MFs, Rs 912 crore (Rs 9.12 billion) has been mobilised through new fund offerings.
'As our per capita income increases and various demographic segments emerge, the need for various kinds of protection and risk covers will become even more explicit.'
Over 25 per cent of the net flows have been directed toward the large-cap category as investors preferred to put money in the top 100 stocks by market capitalisation because the segment has been the most resilient over the past year.
After Bandhan MF's US Treasury Bond 0-1 year Fund of Fund (FoF), Aditya Birla Sun Life (ABSL) MF has come out with US Treasury 1-3 Year Bond ETFs FoF and 3-10 Year Bond ETFs FoF. US bonds, which generally offer low yields, have turned attractive post the 525-basis point hike in US interest rates. According to Bloomberg data, the 1-year and 2-year US treasury yields now stand at 5.4 per cent and 5.1 per cent, respectively. Although the yields remain lower than what Indian government bonds offer, the differential has come down steeply.
Systematic investment plans (SIPs) of mutual funds (MFs) have seen a spike in demand with new registrations touching a five-year high already this year. Around 19.5 million new SIPs have been registered till December end, as against 14.1 million in the whole of financial year 2020-21 (FY21). Market participants say increasing investor awareness and positive experiences have spurred this increase.
Retail investors now own a bigger slice of small-cap companies than a couple of years earlier, attributable to their growing conviction in mutual fund (MF) schemes focused on this space. Data from Capitaline shows MFs' average holding in the National Stock Exchange Nifty Smallcap 250 rising to 8.67 per cent, from 7.67 per cent in the past two financial years, with the number of companies with over 20 per cent MF holdings, rising from 15 to 24. At the end of May, the top five small-cap firms with the highest MF holdings were Carborundum Universal, Blue Star, Cyient, Gujarat State Petronet, and Cholamandalam Finance.
Investors continue to back-up equity mutual funds in June as such schemes attracted a net inflow of Rs 15,498 crore on strong flows from systematic investment plans despite volatility in the stock market and relentless selling by Foreign Portfolio Investors (FPIs). This also marked the 16th straight month of positive inflow in equity schemes. Inflows into equity mutual funds in June was lower compared to the net inflow of Rs 18,529 crore seen in May, data from the Association of Mutual Funds in India (AMFI) showed on Friday.
Following the sharp run in markets, valuations across the board have become elevated. The National Stock Exchange Nifty50 Index now trades at a 12-month trailing price-to-earnings (P/E) multiple of 24.3 times, 18 per cent higher than this year's low of 20.5 times. The valuation expansion in the broader markets has been sharper.
Mutual funds have ratcheted up Rs 53,700 crore (Rs 537 billion) through new fund offers (NFOs) in 2022 until November, against Rs 1 trillion in Calendar 2021, notwithstanding the number of launches this year eclipsing the 2021 tally. Industry insiders cite the absence of launches in popular categories as the reason behind lower collections this year. Typically, only NFOs in popular categories from major fund houses rake in the moolah.
Mutual funds recorded Rs 7,600 crore net inflows into active equity schemes in July even as redemptions surged to a 30-month high of Rs 30,400 crore owing to profit booking, reveals data from the Association of Mutual Funds in India (Amfi). Equity net inflows were 13 per cent lower compared to the preceding month's tally. The inflows were supported by a strong flow from retail investors through the systematic investment plan (SIP) route.
Omkeshwar Singh, head, Rank MF, a mutual fund investment platform, answers your queries.
Equity mutual funds attracted Rs 6,120 crore in August, the lowest level in 10 months, amid a volatile stock market environment. This was the 18th straight month of inflows in equity mutual funds but the pace of inflow has been declining over the past few months. The net inflows in August were lower compared to Rs 8,898 crore in July, Rs 15,495 crore seen in June, Rs 18,529 crore in May and Rs 15,890 crore in April, according to data released by Association of Mutual Funds in India (Amfi) on Friday.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
Now that bank FD rates have gone up and most BAFs haven't delivered good returns, these investors are likely to be moving back to FDs, observed a senior MF distributor. The performance of BAFs in the past year has been mixed.
'Strong regulations are crucial for the orderly development of the market.'
Decisions should not be based on feelings, such as optimism or pessimism about the stock market or specific investment products, suggests Avinash Luthria.
This was also the 10th consecutive monthly net inflow, data with Association of Mutual Funds in India (Amfi) showed on Monday. In comparison, equity mutual funds logged net inflow to the tune of Rs 11,615 crore in November, Rs 5,215 crore in October, Rs 8,677 crore in September and Rs 8,666 crore in August.
The bulk of an investor's portfolio should be in shorter-duration funds of up to one year portfolio duration.
Riding the wave of the equity market, the mutual fund (MF) industry experienced double-digit growth in Samvat 2079, concluding the Hindu calendar year close to the Rs 50 trillion assets under management milestone. After a subdued 6 per cent growth in Samvat 2078, the industry's assets surged over 18 per cent last year to Rs 46.7 trillion. Industry players anticipate that Samvat 2080 will also be a fruitful year for the asset management industry, given the strong inflows from retail investors, particularly through the systematic investment plan route.
The mutual fund (MF) industry has seen a fair number of new entrants in the last 10 years but none of them have proved to be much of a challenge for the larger players. The list of top 20 fund houses, which manage over 90 per cent of the industry's total assets, continues to be dominated by players who have been in the business for more than a decade. Bajaj Finserv MF may change that, say experts.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
'Auto, pharma, and industrials have delivered well in the recent quarter, while businesses like quick-service restaurants, consumer staples, and durables have underperformed in volume growth.'
Fund houses are exploring ways to differentiate themselves in the hybrid space. A relatively unknown hybrid fund variant, Balanced Hybrid, is about to see its first launch since the introduction of mutual fund (MF) scheme categorisation norms in 2017. WhiteOak Capital MF has filed papers with the regulator for this scheme, which comes amid increasing interest in the hybrid space. MFs anticipate that hybrids will become the preferred category for investors with a lower risk appetite following changes in debt fund taxation.
Industry players say they have learnt from the bitter experience of 2008 and have far better checks and balances in place to avoid an encore.
