The continued MF buying has pushed the equity holding of MFs to over Rs 50 trillion for the first time.
'A staggered investment approach (using SIP or STP) can help investors benefit from this opportunity while reducing timing risk.'
In January, SIP account closures surpassed new registrations for the first time.
The majority of active largecap funds are set to outperform for the second year in a row in 2024, thanks to the strong performance of their midcap and smallcap allocations.
The change in debt fund taxation is seen as boosting the demand for hybrid funds. It is no surprise then that asset management companies (AMCs) have launched a raft of new products in the multi-asset category. However, they seem to be divided on the asset mix and approach. The multi-asset space, which provides fund houses ample scope to innovate, has seen five launches in as many months.
The factor fund launch spree by mutual funds (MFs) is moving from the passive to the active space. Two new fund offerings (NFOs) - ICICI Pru Active Momentum Fund and Bandhan Multi-Factor Fund - are currently open for subscription. Sundaram MF's multi-factor fund NFO closed this Wednesday.
After a stellar 2023, the mutual fund industry sustained its growth momentum in 2024 with an impressive Rs 17 lakh crore surge in assets, driven by buoyant equity markets, robust economic growth, and increasing investor participation. Experts are predicting the positive trend will extend into 2025.
'A 20 per cent equity allocation to ESG funds is a good start.' 'As more evidence on ESG performance builds, investors may increase allocations.'
Since MAAFs invest across multiple asset classes, they offer diversification.
Multi-asset allocation funds emerged as the most popular option for MFs as they provided the needed flexibility.
These funds at times invest in companies going through corporate restructuring, such as mergers, demergers, or buybacks.
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.
Mutual funds are looking to tap into the special opportunities theme ahead of the results of the general election results and the continued uncertainty on the geo-political and interest rate fronts. Two fund houses - WhiteOak Capital and Samco - are set to launch special opportunities funds next week. Kotak MF has also filed papers with the regulator to launch a scheme in the same category.
'If their allocation to certain segments have become high due to strong returns over the past three-four years, they should rebalance their portfolios and bring them in line with their long-term asset allocation.'
And there have been months when flows have exceeded $3 billion.
The SIP route suits the salaried class, by matching their income flows with investment frequency.
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.
'Chasing sectors which have reported strongest earnings is not always the right strategy for outperformance.'
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