Viresh Joshi, a former chief trader and fund manager of Axis Mutual Fund, has been arrested under the anti-money laundering law in a case linked to alleged cheating of investors to the tune of Rs 200 crore by 'front-running' in trade activities, the Enforcement Directorate (ED) said on Sunday.
'Investors can consider staying invested in long duration products as there is a possibility of rate cuts in the near term.' Positive macros - lower inflation, high forex reserves and favourable demand-supply dynamics for government bonds - make a strong case for rate cuts from December, says Devang Shah, head of fixed income, Axis Mutual Fund. In an interview with Abhishek Kumar in Mumbai, Shah says this view may not hold true if commodity prices go up sharply.
Investors having a moderate-risk profile can use these funds in their retirement portfolios.
Following the money and freezing anything unaccounted is the only way to set an example for others, suggests Debashis Basu.
'They are positioned as defensive products and can potentially give marginally higher returns than liquid funds.'
'A staggered investment approach (using SIP or STP) can help investors benefit from this opportunity while reducing timing risk.'
'Maintain a balanced approach with a preference for short-to medium-duration funds.'
The Securities and Exchange Board of India (Sebi) could soon issue interim orders imposing a market ban on the two former fund managers of Axis Mutual Fund (MF) for suspected front-running of trades, said people with knowledge of the development. "The market regulator has gathered prima facie evidence that demonstrates that the duo has violated the integrity of the market. "While a detailed investigation is still pending in the matter, Sebi could take action under Section 11 (4) to prevent further harm to the investors and the securities market," said a source.
'Sebi's measures are necessary to align the derivatives market with its underlying cash market, as the current disconnect is unsustainable.'
With the RBI infusing Rs 7.5 lakh crore in liquidity -- and possibly more in the future -- the short- to medium-term corporate bond market is expected to benefit.
Front-running is a fraudulent practice where traders exploit advance knowledge of large client orders for personal profit.
Novice investors must understand that volatility is an inherent part of equity markets and learn to navigate through such phases.
Business cycle funds aim to optimise returns by aligning their portfolios with different phases of the economic cycle. First-time investors, those who prefer stable sector allocations, and those averse to volatility should steer clear of them.
'A dynamic bond fund acts like a gilt fund in a rate cut scenario and like a conservative short-term bond fund when rates rise.'
'When interest rates rise, the NAVs of these funds will fall.' However, they won't fall as much as longer-duration funds.
'The problem is that the bubble may not only be in valuations, but also in investors' minds.'
Cases of front-running mostly happen when large asset managers and intermediaries are involved in bulk trades as their transaction size is generally big enough to impact the stock price.
Equity supply may hit Rs 6 trillion soon.
'An equity-based index fund should be held for more than five years to average out market volatility and achieve financial goals.'
'Those trying to use these funds for quick gains should avoid them due to risk of being late to the party.'
After a sharp rally in the equities market this year, investors could be better off rotating some funds towards the debt market. Experts believe several tailwinds could spur bond market returns over the next 12-18 months. These include India's robust macroeconomics, declining inflation, and the imminent passive flows of close to Rs 2.5 trillion on account of domestic sovereign bonds getting included in the JP Morgan global indices.
Tactical investors should have an investment horizon of around six months to one year, long-term investors should stick around for 10 years or more.
The Indian equity markets have significantly increased in importance within the emerging market (EM) basket of stocks in recent years. Since 2018, India's weighting in the Morgan Stanley Capital International (MSCI) EM Index - tracked by passive funds with assets of nearly $500 billion - has doubled, while the number of domestic stocks has grown by almost 70 per cent.
According to sources, the two fund managers allegedly made illicit gains worth Rs 150 crore to Rs 200 crore through front-running.
Markets regulator Securities and Exchange Board of India (Sebi) is examining allegations of front-running and other irregularities against a host of domestic fund managers across the asset management industry, said people in the know. Developments at Axis Mutual Fund have prompted the regulator to speed up probe to ensure that there is no drop in confidence in the Rs 39-trillion mutual fund (MF) industry. "We have received complaints against a few fund managers and are looking into possible violations, including those related to code of conduct," said a regulatory source, refusing to divulge names of fund houses as things are at a preliminary stage.
HDFC Asset Management Company (HDFC AMC) reported a healthy profit after tax (PAT) of Rs 430 crore for the July-September quarter (Q2) of financial year 2023-24 (FY24). It rose 20.2 per cent year-on-year (Y-o-Y) and decreased 8.4 per cent quarter-on-quarter (Q-o-Q). This was driven by good equity returns, leading to a sequential improvement in revenue yields.
Bond markets, global as well as domestic, are likely headed towards hard times over the next three to six months, as higher vegetable prices, rising fuel costs, and improved wages may keep inflation hot, believe analysts, who expect the yields to hit 7.5 per cent in the near-term from the current 7.234 per cent. In this backdrop, they suggest investors can put in money in funds/instruments with residual maturity of 4 to 6 years, while longer-term investors can allocate cautiously to the longer end in the range beyond 7 years.
Quant funds have a very short track record, and have underperformed so far, reveals Sarbajeet K Sen.
Improved credit profile may make you eligible to transfer your existing home loan to another lender at a much lower rate.
'We will likely be buffeted by tailwinds from the global economy, geopolitical shifts and robust domestic demand.'
If India has to grow at 8.5 per cent, the core of the portfolio must be in banking.
Industry players credit Sebi's first woman chairperson with putting special emphasis on cyber security, use of tech and data, areas where Sebi is trying to 'stay ahead of the curve'.
'Making money in such markets is typically harder and investors need to put in considerable effort to identify stock ideas over the year.'
Omkeshwar Singh, head, Rank MF, a mutual fund investment platform, answers your queries.
Retail investors may safely invest in shorter-duration funds, suggests Sanjay Kumar Singh.
The BSE Midcap and the Small-cap Index have run up 25.3 per cent and 31.3 per cent respectively over the past year. Valuations are no longer cheap, notes Sanjay Kumar Singh.
'For the same level of return, you can reduce portfolio volatility significantly with a 10% to 15% exposure to international funds.'
For non-banks, the IL&FS crisis was nothing short of India's Lehman moment, which has for a foreseeable future reset the sector on multiple grounds.
Issuers are currently not comfortable with the bids they have been getting for their bond offerings.
IT sector replaces auto sector after a 6-month gap.
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