'Investors repose trust in MFs'
Fund inflows into the mutual fund industry via the SIP route are steady, tells Harsha Upadhyaya, Chief Investment Officer- Equity, Kotak Mahindra Asset Management Co to B Krishna Mohan
Mutual fund industry has matured. While there is turmoil in the markets, retail investors are willing to stay invested for more than three years. Fund inflows into the mutual fund industry via the SIP route are steady, tells Harsha Upadhyaya, Chief Investment Officer- Equity, Kotak Mahindra Asset Management Co to B Krishna Mohan
Here are the excerpts:
Mutual fund industry
The industry is maturing and is now handling about Rs 25.5 lakh crore. Of this, 40 per cent is equity. Telangana and Andhra Pradesh account for Rs 68,5000 crore with Rs 38,000 crore going into the equity market. The persistency is seeing a steady rise and now it stands at more than 1,100 days. SIPs are growing and are contributing about Rs 1 lakh crore a year or about Rs 8,500 crore every month.
We have assets under management of Rs 1.7 lakh crore. We are sixth in the industry now, an improvement of one place from seventh position in March 2019. We have multiple sales channels – banks, digital and independent financial advisers.
Focus is on private banks, industries, chemicals, cement, infrastructure. These segments have growth potential. NBFC crisis in the banking system is one of the reasons for us to be bullish on the NBFC segment. Growth in the infrastructure will continue despite some cyclical issues. We will be selective with the companies within these. Our portfolio also includes pharma.
There has been a visible slowdown in some sectors. Delayed monsoon this season, below expectations financial performance in the first quarter are among the reasons. There is some volatility in the market now. But we will selective with the companies. It is not clear if the overall household savings are increasing or not but there is no big impact on the quantum of SIPs. Since there are not many safe-haven asset classes one should not very aggressive with investing. It should be a measured and disciplined and sustained activity with an objective to make returns to beat inflation and give some cushion.
We can say we are in a bear market, particularly with small and mid-cap stocks. In the previous episodes of bear phases, many investors withdrew from the markets and returned after protracted intervals. Now, they are rejigging the portfolio but are not refraining from market participation. There has been some withdrawals from FPIs in the recent two or three months. But however, the net inflows are positive for the year. Previously it was $ 12 billion. Now, it has come down to $ 9 billion after the recent withdrawals of $ 3 billion.
We have garnered about Rs 1,200 crore for the recently announced Kotak Focused Equity Fund. We are yet to invest that and are now looking at possible strategies, quantum of investments and other pointers.
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