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Mutual funds' equity buying remained elevated for the fifth consecutive month in December, taking the net equity purchase past Rs 1.7 trillion in 2023. The aggressive buying in December indicates that flows into equity funds are likely to have remained unaffected by the sharp run-up in the market last month. Mutual funds (MFs) bought equities worth Rs 23,000 crore last month (until December 28) compared to Rs 18,000 crore in November, shows data from the Securities and Exchange Board of India (Sebi).
rediffGURU Dev Ashish answers your personal finance and mutual fund queries.
rediffGURU Dev Ashish answers your personal finance and mutual fund queries.
Mutual fund houses have been on an equity buying spree in the past three months as they have invested a net amount of Rs 55,000 crore in them between January and March 2023. The number is more than double the amount deployed in the preceding three months (October to December), signalling improved valuations and favourable economic indicators. The valuations, which had peaked in October 2021, returned to its long-term average in March 2023.
One common mistake investors commit during profit booking is not having a plan for the redeployment of the money that comes into their account.
'Investors should ideally consider equity allocations from a medium-to-long term perspective.'
Rebalance your portfolio in case it has become overweight on equities vis-a-vis your strategic asset allocation.
When the subscriber reaches superannuation or the age of 60, 60 per cent of the total corpus accumulated in NPS can be withdrawn as a lump sum.
Mutual funds (MFs) have stepped up equity purchases after staying on the fence for over two months. Their net equity investments reached a four-month high of Rs 7,700 crore in July, rising for the fourth consecutive month after withdrawing a net of Rs 5,100 crore in April 2023. This trend continued in August, with net investments of Rs 3,400 crore in the first three trading sessions, according to data from the Securities and Exchange Board of India.
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.
'Starting an SIP now and continuing with it is likely to translate into high returns over the long term.'
Multi-asset funds offer exposure to gold, which tends to do well in times of geopolitical tensions and inflationary pressures, suggests Sanjay Kumar Singh.
Lump sum investments in equity and hybrid schemes of mutual funds (MFs) declined to Rs 17,900 crore in October - the lowest since January 2021. The fall in lump sum investments comes even as flows through systematic investment plans (SIPs) rose to a new all-time high of Rs 13,000 crore in October. The latest lump sum tally is just a third of the peak inflow of Rs 49,700 crore in July 2021.
The bull run in the Indian equity markets is intact, said analysts at Morgan Stanley in a recent note. They expect the S&P BSE Sensex to hit 80,000 levels by December 2023 in their bull-case scenario, to which they have assigned a 30 per cent probability. From the current level, this translates into an upside of nearly 29 per cent.
Investors who cannot manage an asset-allocated portfolio or rebalance regularly, or do not have an advisor, may opt for these funds, but only after a detailed study of their strategy, suggests Sanjay Kumar Singh.
Modi government's story of five years with regard to equity allocation for PSUs shows that it may have allowed a large part of its resources to be wasted. This is also a worrying reflection of the government's inability to take hard decisions - whether they pertain to privatisation or forcing weak public-sector banks to wind down their operations, says A K Bhattacharya.
'Very few of small investors stay invested for those three or four or five years.' 'If there's like a six month, one-year period when market is not doing well, you exit.' 'After the market has run up, you get in again.' 'This way you will never make returns.'
'Largely, new demat accounts are now being opened by the younger crowd, particularly GenZ.' 'This is great news since younger investors start their journey with very little capital, so they are risking less.'
State Bank of India (SBI) on Tuesday announced the launch of its first "state-of-the-art" dedicated branch for start-ups in the country here, to facilitate and support them. The branch launched by SBI chairman Dinesh Khara is located in Koramangala, which alongside neighbouring HSR Layout and Indiranagar are the biggest start-up hubs in the city. "...overall we are in a position to provide end-to-end services to start-ups, with that in mind this particular start-up branch is the first start-up branch we are starting, from the capital city of start-ups- Bengaluru.
Many investors want to exit equities now and re-enter when they begin to rise. Such timing is difficult to pull off.
Since NPS is used for a long-term goal like retirement, allowing younger investors to have higher exposure to equities will give them a chance to earn higher returns.
Small-cap funds have enjoyed a massive run-up over the past year. The category has turned in an average return of 109 per cent - the best-performing fund has yielded a humongous 201 per cent. Many investors, however, are concerned whether the category has turned risky after such a sharp rise.
'There will be a series of rate hikes, but the pace and quantum will depend on how the economy in the US and the rest of the world behave.'
'Do some profit booking and bring your equity allocation back to its original level.'
Here's how to get high returns from equities...
Despite the current bout of volatility, debt-oriented hybrid funds remain well suited for risk-averse investors.
Raising equity exposure to 50 per cent in the National Pension Scheme will benefit young investors, provided they can stomach higher volatility.
Omkeshwar Singh, head, Rank MF, a mutual fund investment platform, answers your queries.
Mutual funds (MFs) are set to be net sellers of Indian equities for the first time in the past seven financial years, having sold stocks worth about Rs 1.27 trillion so far in 2020-21 (FY21), making it the highest net sales on record in a financial year. MFs had been net buyers in the previous six financial years, including purchases of over Rs 1.41 trillion in FY18, Rs 88,152 crore in FY19, and Rs 91,814 crore in FY20. The last time they offloaded Indian equities was in FY14, when they net sold stocks worth Rs 21,159 crore. In contrast, foreign portfolio investors (FPIs) have ramped up buying in FY21, purchasing more than Rs 2.6 trillion worth of shares.
G Murlidhar, MD and CEO, Kotak Mahindra Life Insurance Company explains how to make smart financial decisions for better gains.
ICICI MF recently filed for an ETF that will track the Nifty Alpha Low-Volatility 30 Index. It is part of the suite of smart-beta indices with the NSE, with the portfolio designed using a combination of two factors.
From April 1, subscribers will be able to change investment option & asset allocation twice a year, instead of once. Use greater flexibility offered by pension scheme judiciously.
New retirement schemes from MFs offer Section 80C benefit but locks in your money for five years
Given its features as a retirement product (long lock-in and compulsory annuitisation), investors should have other investments they can fall back on in case they need funds
Since there are many and complicated choices, retail investors stand to benefit
'If I close my housing loan, are there any investment avenues (the investment should provide liquidity) to save tax?'
These funds have delivered consistently on parameters like performance, restraining volatility, portfolio management style and adherence to investment objective.
Coalition governments aren't necessarily a negative for the economy, though they can result in negative outcomes in the stock market if not already priced in before elections.
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