The amount of money which MFs are receiving is largely backed by retail investors as well as high net worth individuals (HNIs).
Mutual funds touched a historical landmark when assets under management (AUM) rose more than Rs20 lakh crore in the month of August for the first time ever.
Retail investors which left Indian equity markets to post global financial crisis in 2008, are back on D-Street and this time it looks like they are in for long haul.
The amount of money which MFs are receiving is largely backed by retail investors as well as high net worth individuals (HNIs). Most of the MFs in the last one year has been able to beat benchmark index returns by a wide margin.
We have taken a stock portfolio of top 4 funds ranked as number 1 by Crisil in the largecap space. Most of the stocks where the big boys of the mutual fund industry are betting on are mostly bluechip stocks.
Equity funds that invest over 75 percent in CRISIL-defined Large Cap Stocks for a minimum of six out of nine months in each period over the past 3 years.
Top four funds ranked as number 1 by Crisil ranking have given a return of 13-20 percent compared to Sensex return of 9 percent in the last one year.
“We are carefully considering and evaluating which stocks must be bought,” Nilesh Shah, MD, Kotak Mahindra Asset Management Company (AMC) told CNBC-TV18 in an interview. We are sticking to our core and definitely not going by what SMS-based recommendations are floating in the market, he added.
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There is a problem of plenty for such managers. On being asked about the approach in such cases, Shah explained it with a hypothesis of his own. He highlighted the profit percentage as part of GDP is around 3 percent, a fall from 7 percent in 2008.
Top stocks which are part of their portfolio include well-known names like SBI, HDFC Bank, ITC, ICICI Bank, Axis Bank, RIL, Hero MotoCorp, Maruti Suzuki, HDFC, IndusInd Bank, Infosys, UPL, Nestle, Tata Motors, Vedanta, Hindalco, HCL Technologies etc. data showed from Moneycontrol’s mutual fund section.
The AUM of the MF industry had doubled in the last three years, rising from Rs10.1 lakh crore in August 2014 to the current Rs20.60 lakh crore.
“The last three years and especially the last year have been characterized by large inflows into Equity and Balanced Funds, with increasing participation from retail and HNI investors. Individual investor’s share of overall AuM has increased to 48% from 45% a year ago,” Kaustubh Belapurkar, Director - Manager Research, Morningstar Investment Adviser India Pvt. Ltd said.
Experts see more investors entering equity markets are with the long term outlook in mind, thanks to systematic investment plans (SIPs).
According to AMFI, the mutual fund industry added about 6.2 lakh SIP accounts every month on an average during FY2017 with an average ticket size of over Rs3,000-5000 per account.“Retail investors are increasingly investing in Mutual Funds through SIPs (Systematic Investment Plans), which helps them reduce market timing risk. Currently, the industry receives closes Rs5000 crore per month through SIPs, which is a very healthy number,” said Belapurkar.