Mutual Fund Corner – cnbctv 18

January 3, 2024

Financial expert Mrin Agarwal urges goal-oriented investing for maximum returns

The mutual fund industry’s resilience and growth demonstrated in 2023 have laid the groundwork for a promising 2024. With robust returns across various categories and a positive outlook driven by strategic investment approaches, the industry continues to be an appealing avenue for wealth creation and goal-oriented investments.

According to Mrin Agarwal, Financial Educator & Director of Finsafe India, investing any amount of money should always be goal-based. Selecting the right instrument depends on the investment’s timeframe and purpose.

For instance, investing in equities may not be suitable for a short-term goal due to volatility. Agarwal emphasizes the importance of choosing the appropriate instrument to ensure the desired outcome, especially in areas like retirement planning.

Agarwal highlights retirement as a crucial goal for everyone, emphasizing the need to save for a time when one is no longer working. She stresses that retirement planning extends beyond day-to-day expenses, encompassing mental engagement and discretionary spending. Additionally, Agarwal mentions other common goals, such as children’s education expenses and purchasing a house in the short term.

For young investors, Agarwal advises selecting a good mutual fund and sticking with it. She specifically recommends a simple index fund, emphasizing its effectiveness for this demographic.

Watch the accompanying video for the entire conversation.

December 14, 2023

Evaluating fund managers crucial in the era of growing AMCs, says expert

With a significant surge in mutual fund investments and the emergence of many new asset management companies (AMCs), a key challenge for investors is how to evaluate the pedigree of fund managers when considering new AMCs.

Kushal Bhagi, the proprietor of PCC Investing, suggests examining the track record of the fund management team, assessing past experiences with them, and determining if they offer a unique proposition not present in the existing portfolio.

Noteworthy entrants in this competitive landscape include BlackRock, which is re-entering the Indian market in collaboration with Jio, and the relatively newer and youthful Zerodha.

While the growing presence of these companies reflects the strength and potential of the Indian mutual fund sector, it poses a challenge for investors in choosing the right fund house and fund.

According to Bhagi, the track record of currently active schemes should carry weight unless the newer AMCs present a distinct strategy that addresses gaps in investors’ portfolios.

He suggests a more cautious approach for these schemes compared to established AMCs. However, for first-time or passive investors, the advantage of existing AMCs might be somewhat diminished against newer players, he added.

In November 2023, equity mutual fund inflows registered a decline of 22.16%, as reported by the Association of Mutual Funds in India (AMFI). The segment witnessed inflows of Rs 15,514.5 crore compared to Rs 19,932 crore in October.

On a positive note, systematic investment plans (SIPs) crossed the Rs 17,000 crore mark for the first time in November. The SIP book reached Rs 17,073 crore, surpassing the Rs 16,928 crore recorded in October.

Watch the video for full report

November 16, 2023

Large-cap stocks likely to outperform mid and small-caps, says SBI Mutual Fund’s CIO

R Srinivasan, chief investment officer (CIO) of equity at SBI Mutual Fund, expresses a cautious stance on the small-cap space, citing lingering euphoria and perceived overvaluation in certain stocks.

According to Srinivasan, the current market scenario favours large-cap stocks over mid and small-caps. He anticipates that large-caps will outperform their smaller counterparts.

“We are still negative on the small-cap space, we do think there is still some euphoria in the small-cap space. We do think that some of these stocks are expensive.

We think that currently large-caps are much better positioned than mid and small-caps. So our view is that large-caps will do better than small-caps,” Srinivasan told CNBC-TV18.

Despite the outstanding performance of mid and small-caps in 2023, with the small-cap index surging by 43% and midcaps rising by 32%, large-caps have shown relatively subdued activity during the same period.

Srinivasan shares a positive outlook on the financial sector, emphasising its potential for recovery. Despite being a laggard in the previous year, financials are seen as promising due to their substantial capital reserves.

He notes that financials, being pro-cyclicals, are well-positioned for the early stages of an economic recovery. He acknowledges the sector’s underperformance, attributing it to being a consensus trade, but deems it favourable on a relative basis.

In terms of specific investments, Srinivasan discloses holdings in public sector banks within the financial sector. Additionally, the fund has invested in niche Non-Banking Financial Companies (NBFCs) where they perceive a competitive advantage, highlighting positions in companies such as Bajaj Finance and Muthoot Finance.

Watch the accompanying video for the entire conversation.

November 10, 2023

Edelweiss Asset Management CEO urges investors to diversify across large, mid, and small-cap mutual funds

Radhika Gupta, MD and CEO of Edelweiss Asset Management in an interview with CNBC-TV18, emphasised the need for investors to maintain a balanced split between large, mid, and small-cap mutual funds.

Traditionally, the prevailing wisdom suggested that large-caps should form the core of a portfolio, with mid and small-cap mutual funds added for diversification. However, the dynamics of the Indian economy are evolving rapidly, and Radhika Gupta believes that large-cap funds alone may no longer offer an accurate representation of the country’s economic landscape.

“In current market conditions, investors need to have a fairly balanced split between large, mid, and small caps. There was a school of thought that said equity investing meant the core of your portfolio was large cap and you had a little bit of flavour of mid and small cap, but if you look at the composition of the economy today and the decade forward then the large cap will not give you an accurate representation of the Indian economy.

Many sectors and themes that will emerge will be from the mid and small-cap space. So you need a portfolio that is large, mid and small-cap oriented. So multi-cap mutual funds as a category works really well for most investors and you can supplement it if you want with additional mid and small-cap exposure,” Gupta said.

The latest data from AMFI for September 2023 confirms the evolving trends in mutual fund investments. While equity mutual fund inflows slipped slightly on a month-on-month basis, they remained robust at Rs 13,857 crore.

A noteworthy trend observed was the continued preference for mid-cap and small-cap funds, which continued to attract investments. In contrast, large-cap funds experienced outflows, reflecting the changing investment landscape.

Systematic Investment Plan (SIP) inflows for September 2023 reached an all-time high at Rs 16,042 crore, signifying a substantial increase from the previous month’s Rs 15,814 crore.

This surge in SIP investments indicates that investors are increasingly recognizing the potential of systematic and disciplined investment strategies, even in a slightly uncertain market environment.

Radhika Gupta also shared her perspective on the ideal number of mutual funds for investors. According to her, most investors would benefit from holding between 8 and 12 mutual funds in their portfolio.

This recommended allocation includes 4 to 5 core categories of funds, with a mix of equities, international exposure, and debt. Additionally, Gupta suggests including two funds from different asset management companies (AMCs) within the same category for further diversification.

Watch accompanying video for entire conversation.

Multi-asset mutual funds are best suited for passive investors looking for diversification and tax efficiency, says expert

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Summary

Sanghvi, in an interview with CNBC-TV18, stated that multi-asset mutual funds are particularly well-suited for passive investors seeking diversification and tax-efficient investment options. She emphasised that a time horizon of 3 to 5 years is ideal for those considering investments in this category.

In September, multi-asset mutual funds experienced a significant surge in inflows, reaching Rs 6,324 crore, a substantial increase from the Rs 1,617 crore recorded in August 2023. Salonee Sanghvi, the Founder of My Wealth Guide, attributes much of this category’s newfound popularity to the recently implemented tax structure, which took effect on April 1.

The revised tax structure has removed the indexation benefit for funds with less than 35% allocation to equities. Given that multi-asset funds allocate 65% of their investments directly into equity or through hedge funds and the remainder into a combination of debt and gold, they are in a more favorable position compared to pure debt funds.

“Multi-asset funds can be a great option for people looking for diversification since it invests in different asset classes and reduces risks. Another category could be passive investors who prefer a hands-off approach and want a professional manager to take the rebalancing call between different asset classes along with the tax efficiency that it offers,” Sanghvi said.

Nevertheless, Sanghvi cautioned that multi-asset funds come with higher costs due to their elevated expense ratios. Additionally, they do not offer customisation or control over asset allocation, as the fund manager makes allocation decisions based on prevailing market conditions.

Sanghvi also pointed out that, over a longer duration, multi-asset funds typically tend to underperform the equity markets, primarily due to asset diversification. On average, over a three-year period, multi-asset funds have delivered a Compounded Annual Growth Rate (CAGR) of 15.5%, compared to the Nifty’s 19.7% returns, she noted.

Watch accompanying video for entire discussion.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

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today's market

Global Top Gainers Top Loosers nifty sensex

index	Price	Change
nifty 50	₹16,986.00	-72.15
sensex	₹1,882.60	+28.30
nifty IT	₹2,206.80	+30.85
nifty bank	₹1,318.95	-14.95

index	Price	Change
nifty 50	₹16,986.00	-7.15
sensex	₹1,882.60	+8.30
nifty IT	₹2,206.80	+3.85
nifty bank	₹1,318.95	-1.95

index	Price	Change
nifty 50	₹16,986.00	-72.15
sensex	₹1,882.60	+28.30
nifty IT	₹2,206.80	+30.85
nifty bank	₹1,318.95	-14.95

index	Price	Change
nifty 50	₹16,986.00	-7.15
sensex	₹1,882.60	+8.30
nifty IT	₹2,206.80	+3.85
nifty bank	₹1,318.95	-1.95

index	Price	Change
nifty 50	₹16,986.00	-7.15
sensex	₹1,882.60	+8.30
nifty IT	₹2,206.80	+3.85
nifty bank	₹1,318.95	-1.95

Currency

Company	Price	Chng	%Chng
Dollar-Rupee	73.3500	0.0000	0.00
Euro-Rupee	89.0980	0.0100	0.01
Pound-Rupee	103.6360	-0.0750	-0.07
Rupee-100 Yen	0.6734	-0.0003	-0.05

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October 10, 2023

Longer maturity debt funds to benefit from RBI OMO sales and inclusion of Indian bonds in JPMorgan Index, says expert

On October 6th, the Reserve Bank of India (RBI) and the Monetary Policy Committee (MPC) surprised the market by unveiling an Open Market Operations (OMO) bond sales program. This unexpected move caused a significant uptick in the yield of Indian 10-year bonds, pushing it from its previous closing rate of 7.21% to 7.35%.

Adding to this financial development, JPMorgan Chase & Co. made an announcement regarding the inclusion of Indian government bonds (IGBs) in its benchmark Emerging Market index, starting from June 28, 2024. According to Morgan Stanley, this inclusion is anticipated to attract inflows of approximately $40 billion into India.

Joydeep Sen, a Corporate Trainer & Author, in an interview with CNBC-TV18, expressed optimism about the impact of this news on debt funds, emphasising that longer maturity debt funds would likely see the greatest benefits compared to their shorter-term counterparts as the yields are likely to ease going ahead.

For those considering fresh investments in debt funds, Sen recommended opening new folios to take advantage of taxation benefits.

Notably, in the Budget of 2023, the government introduced changes to the taxation of capital gains from debt mutual funds. Government announced that from April 1, 2023, these gains will be categorised as short-term capital gains. Additionally, debt funds held for more than three years will no longer qualify for indexation benefits and will no longer be eligible for the 20% tax rate.

Watch accompanying video for entire conversation.