Investors pumped Rs 491 crore in gold exchange traded funds (ETFs) in February as they seem be taking advantage of the lower domestic prices caused due to declining international rates, appreciating rupee and reduction in custom duty. This came following a net investment of Rs 625 crore in January and Rs 431 crore in December. Prior to this, gold ETFs had seen an outflow of Rs 141 crore in November, data available with Association of Mutual Funds in India showed.
'Some risks to this market rally include inflation, erratic weather conditions, rising crude prices, slowing global growth and the resultant impact on domestic exports, escalation in geopolitical tensions.'
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.
Close-ended equity funds, launched with fanfare three years ago, have disappointed investors with their dull returns. The data from Value Research shows 10 out of 17 close-ended schemes maturing before July have seen one-year returns between 34 and 40 per cent. In comparison, the Sensex Total Return Index (TRI) has rallied 46 per cent over the past one year.
Many investors, who have made money in the rising market of the recent past, are pulling out of equity funds, believing that they can earn more by investing directly.
'Investors should be careful in getting carried away; although a reversal of IPO frenzy this time is taking longer than in the past.'
Women have been leaving the investment decision to husbands.
Invest in liquid funds if you have a horizon of three months, ultra-short-term for six months, and low-duration funds for one year.
'The shadow banks are currently facing a liquidity and solvency crisis.' 'The danger is that it could potentially engulf the entire financial system because shadow banks have borrowed huge amount of money from banks, mutual funds, pension funds, and insurance companies.'
Swift gains on Dalal Street this year have also led to a sharp surge in shares of equity market intermediaries like depositories, exchanges, and registrar and transfer Agents (RTAs). The stock prices of BSE, CDSL, CAMS, and KFin Technologies are up 24-283 per cent so far in 2023 when compared to a 9 per cent rise in the benchmark Nifty index. With the market buoyancy expected to keep up the pace, analysts believe these stocks are a good long-term bet despite the sharp rally, which can trigger an intermittent correction.
Gold exchange-traded funds (ETFs) have further lost favour among Indian investors.
Exodus of top managers an unintended side effect of roaring MF industry
Nikunj Saraf, Vice President Choice Wealth, answers your queries.
There is polarisation among sectors with IT and healthcare receiving the lion's share of FPI money in the past two quarters.
New fund offers collection in the current calendar year was the highest in a decade, with 13 of the 70 equity schemes cornering 75 per cent of the amount raised.
Nikunj Saraf, Vice President Choice Wealth, answers your queries.
While the number of international MF schemes is increasing, so is the confusion for investors.
After a sharp outperformance in the mid-and small-cap segments in the first half of calendar year 2023 (H1-CY23), analysts are now turning cautious on these two market segments and suggest investors stay selective and look for valuation comfort and earnings visibility before investing. The S&P BSE Midcap index has surged 13.7 per cent in H1-CY23, and the S&P BSE Small-cap index gained 12.7 per cent during this period, data shows. The S&P BSE Sensex, in comparison, has moved up 6.4 per cent.
Reliance Industries, construction major L&T and IRB Infrastructure are some of the top companies that have used an infrastructure investment trust structure to reduce part of their debt and generate returns for their investors. Earlier this month, IRB Infrastructure InvIT was listed on the National Stock Exchange, giving its investors an option to exit by selling their units. The listing came within months of the Securities and Exchange Board of India's (Sebi's) guidelines for conversion of private unlisted InvITs into listed ones were issued.
While there is little one can do when the fund house restricts redemptions, it's best to exit even if it means some losses.
Stocks of public sector undertakings (PSUs) have been on fire in the past year as investors cheered an improvement in key operating metrics and embraced counters of these state-owned enterprises, analysts suggest. The S&P BSE PSU Index has gained over 90 per cent in the past year, rising much higher than the S&P BSE Sensex, which has rose nearly 19 per cent during this period, according to ACE Equity data. The BSE PSU Index, reports show, has delivered a compound annual growth rate (CAGR) of 28 per cent (including dividends reinvestments) over five years and risen by almost 60 per cent in the past year.
Monday's steep fall turned Sensex's yearly returns to - 2.57%, but only two large-cap funds did worse.
Experts say the trend is worrying as it could take a toll on the pace of equity flows and also hinder the penetration drive of the Rs 24-trillion MF industry.
On an average, small-cap funds have generated annualised returns of 67.5% in the last two years. Large-cap funds and mid-cap funds have given average annualised returns of 41.3% and 53.4% respectively.
After withdrawing record funds in 2021-22, foreign portfolio investors (FPIs) continued their sell-off in the last fiscal too and pulled out Rs 37,631 crore from Indian equities amid aggressive rate hikes by central banks globally. The outflow trend is likely to reverse in the current financial year since India has the best growth potential in the financial year 2023-24 (FY24), VK Vijayakumar, chief investment strategist at Geojit Financial Services, said. Market analysts believe that FPI flows in the current financial year would be decided by a host of factors, such as the US Federal Reserve's policy stance, oil prices movement and development in the geopolitical situation.
Only commitment and planning can help you reap the benefits of long-term investments, says Abhishek Agarwal
Seek advice from Sebi-registered investment advisors whose names are available on Sebi's Web site.
Investing merely on the basis of past return can land you in trouble even in debt funds, a supposedly safe asset class, suggests Sarbajeet K Sen.
Analysts say those taking exposure through stocks could look at firms focused on domestic business
The most important step is delivering what is needed -- a fairer IPO pricing, notes Debashis Basu.
Brokerages are expanding the universe of stocks they cover amid a boom in the market. Several stocks in the mid-cap universe are now tracked by more analysts than they were a year ago. For instance, SBI Cards and Payment Services is now tracked by 17 brokerages, compared to just four a year ago.
sharper-than-expected economic recovery back home, analysts say, can fuel a further rally in domestic cyclicals, industrials, and financials as global central banks continue with their easy money policy.
The country's mutual fund industry posted five per cent growth in average assets under management (AUM) to touch all-time high of Rs 8.68 lakh crore in May on the back of strong inflows into money market and income funds.
Market regulator, the Securities and Exchange Board of India, has set out five broad categories for mutual fund schemes, including equity, debt and hybrid funds that will benefit investors, says Ashley Coutinho
One of the biggest advantages of index funds and ETFs is their low cost, points out Sarbajeet K Sen.
Equity flows have been under pressure since the second half of 2018, after the IL&FS crisis sent shockwaves in both equity and debt markets.
Domestic mutual funds (MFs) have kept their faith in the Indian stock market despite multiple headwinds all through 2022-23 (FY23), with their net flows into equities crossing the Rs 1.5-trillion mark for the second consecutive financial year. MFs pumped a net Rs 1.53 trillion into equities till March 1, 2023, the Securities and Exchange Board of India (Sebi) data shows, as compared to Rs 1.72 trillion in FY22. Since FY15, MFs have been net buyers of equities, except in FY21, when they sold a net Rs 1.21 trillion.
The sharp rally in the midcap stocks has made valuations expensive, and there is room for a correction, wrote Christopher Wood, global head of equity strategy at Jefferies in his latest note to investors, GREED & fear. The midcap index, Wood said, now trades at 24.1x 12-month forward earnings compared with 18.7x for the Nifty. Rising crude oil prices, he believes, are another worry for India, which imports nearly 80 per cent of its annual crude oil requirement.
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