Banks are parking funds not just in securities qualifying for maintenance of statutory liquidity ratio (SLR), but also in mutual funds (MFs).
Over 85 per cent of SIP AUM, or Rs 5.8 trillion, is in equity schemes, compared to just Rs 6,100 crore in debt.
Industry players say improving the penetration beyond the top centres will require setting up more branch networks and empanelment of distributors.
Staggered pull-out will help investors if the market continues to rise.
The steady inflows from systematic investment plans (SIPs) into mutual funds (MFs), coupled with outflows from debt schemes, has propelled the share of SIPs in the total assets being managed by the industry to a new high of 17.1 per cent in February. SIPs are used predominantly by retail investors. Nearly seven of every 10 SIP accounts are in equity-oriented active MF schemes.
Data shows of the 385 companies, which had announced their latest shareholding, fund houses cut their stake in about 200.
Dept. of Public Enterprises have reminded CPSEs to invest surplus money only in govt-owned MFs.
'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.'
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.
We have no idea where the stock markets are headed in the near term. we cater to clients who are inevsting for the long term, for which we have a view, says personal finance expert Rahul Goel.
In a capital protection scheme, fund houses usually invest a hefty chunk (say 80 per cent) of investor money in debt papers, while parking the remaining 20 per cent with equities.
Tax saving mutual fund schemes invest in the stock markets and therefore carry risk as compared to say a PPF or a NSC.
We have no idea where the markets are headed in the near term. In fact, we do not pay much heed to the Sensex as it is dominated by only a handful of stocks, says Rahul Goel.
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According to market regulator Securities and Exchange Board of India, MF investments in banking stocks reached Rs 48,419 crore (Rs 484.19 billion) as on May 31, accounting for 21.59 per cent of their total equity assets under management (of Rs 2.24 lakh crore or Rs 2.24 trillion).
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.
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.
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.'
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.
The bulk of an investor's portfolio should be in shorter-duration funds of up to one year portfolio duration.
Eight months after India's largest car maker, Maruti Suzuki India, announced plans for a Gujarat unit to be set up as a wholly-owned subsidiary of parent Suzuki, opposition to the move continues to simmer.
Stocks mutual funds had invested in had risen almost to pre-pandemic levels in March.
The decision of the US regulator not to allow financial institutions any further increase in their exposure to commodity futures leaves a question mark on the proposal to allow MFs and banks to trade in commodity futures in India. In India if mutual funds, banks, NRI's and Foreign Institutional Investors (FIIs) are allowed there should be limits fixed by the regulator regarding exposure to commodities. The price discovery function can happen only if there is liquidity.
Decisions should not be based on feelings, such as optimism or pessimism about the stock market or specific investment products, suggests Avinash Luthria.
Tax Guru Anil Rego answers your personal income tax queries
With less than a week to go for the mandatory permanent account number requirement for all new investments in mutual funds to take effect, Securities and Exchange Board of India on Tuesday extended the deadline by another six months to December 31
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.
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.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
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.
'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.'
If you want his advice on your mutual fund investments, please mail your questions to getahead@rediff.co.in with the subject line, 'Mutual Fund Query', along with your name, and Omkeshwar will offer his unbiased views.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
SIPs keep MFs afloat as investors redeem Rs 1.3 lakh crore in one year
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
Awaiting the right opportunity to deploy their funds into the equity market, the mutual fund industry is stting on a huge cash pile of Rs 20,109 crore, even as Foreign Institutional Investors are pouring funds into equities.
In an effort to soothe nerves of the country's mutual funds and the non-banking finance companies, the bankers today assured that they would come forward to support these financial institutions' funding needs including liquidity to meet redemptions.
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