Fund managers the new heroes
Fund managers are the new heroes now! With their active moves, investing judiciously in equities, government bonds and securities, they have given great returns. With more capital pumped in by the investors, mutual fund assets under management has recorded a Rs. 12.02 lakh crores!
Asset management companies just got smarter! The new government policies don't seem to impede their growth. For one thing, they paid out the distributors before the new service tax rules came into play, and they have taken a particular liking for the debt markets.
It is estimated that mutual fund houses have pumped in a staggering six trillion rupees into the debt markets, and this move may be good enough.
This is not driven by sentiment by the way, and has more to do with smart diversification. This might of course be read as a direct consequence of the positivity in the market due to certain reforms by the government and the healthy influx of capital from various sectors.
Reasons attributed to this move to invest largely in debt funds are:
More bullish trends
Mutual fund houses invest more in the banking industry (Rs.7800 crores). 21.32% of the total assets under management comprises of the banking stocks, which quite high when compared to the investments the previous year. More investments in the software, pharmaceutical, and the automotive sectors.
These investments are to create a balanced portfolio by active diversification.
Why debt markets?
Equity market mutual funds have been riding on a high. In fact, there have been huge payouts in the form of dividends by the equity market mutual funds as NAVs have gone up significantly.
Thisis just one side of the coin. There are other things happening parallely that seem to make the fund house managers to move towards the debt markets to secure the interests of the investors. First of all, the expected hike in the interest rate in US is keeping the fund houses on tenterhooks, and active moves to implement further rate cuts from RBI are yet to come.
To make corrections and to reduce risks, fund houses have found good havens in the debt markets. This seems to be the conclusive reason to park a huge percentage of the AUM into the debt markets. It seems that this balancing act would ultimately pay off considering the lesser amount of risk involved in these markets.
Some of the best performing mutual funds have taken these measures to ensure the safety of investor. Having said that, one has to agree that mutual funds investment in India is certainly on a new high despite the market volatilities and the sole reason for that is the smart moves made by fund house managers. Mutual funds investment
Asset management companies just got smarter! The new government policies don't seem to impede their growth. For one thing, they paid out the distributors before the new service tax rules came into play, and they have taken a particular liking for the debt markets.
It is estimated that mutual fund houses have pumped in a staggering six trillion rupees into the debt markets, and this move may be good enough.
This is not driven by sentiment by the way, and has more to do with smart diversification. This might of course be read as a direct consequence of the positivity in the market due to certain reforms by the government and the healthy influx of capital from various sectors.
Reasons attributed to this move to invest largely in debt funds are:
- Government reforms.
- Better fundamentals of the domestic markets.
- More participation from the retail investors.
More bullish trends
Mutual fund houses invest more in the banking industry (Rs.7800 crores). 21.32% of the total assets under management comprises of the banking stocks, which quite high when compared to the investments the previous year. More investments in the software, pharmaceutical, and the automotive sectors.
These investments are to create a balanced portfolio by active diversification.
Why debt markets?
Equity market mutual funds have been riding on a high. In fact, there have been huge payouts in the form of dividends by the equity market mutual funds as NAVs have gone up significantly.
Thisis just one side of the coin. There are other things happening parallely that seem to make the fund house managers to move towards the debt markets to secure the interests of the investors. First of all, the expected hike in the interest rate in US is keeping the fund houses on tenterhooks, and active moves to implement further rate cuts from RBI are yet to come.
To make corrections and to reduce risks, fund houses have found good havens in the debt markets. This seems to be the conclusive reason to park a huge percentage of the AUM into the debt markets. It seems that this balancing act would ultimately pay off considering the lesser amount of risk involved in these markets.
Some of the best performing mutual funds have taken these measures to ensure the safety of investor. Having said that, one has to agree that mutual funds investment in India is certainly on a new high despite the market volatilities and the sole reason for that is the smart moves made by fund house managers. Mutual funds investment
