NS mutual fund Industry assets (AUM) under management continued their upward trend and rose 1.6% in October 37.3 trillion as compared to 36.7 trillion in September. In addition, the industry’s AUM has grown by 20% since the start of the equity-led calendar year. ICICI Securities in its recent report has highlighted some of the trends in the Mutual Fund industry. Let’s take a look at them.
equity fund: Small-cap, as per brokerage Fund Staged withdrawal after a brief period of low performance. Sachin said, “While we remain constructive on mid-cap and small-cap funds, multi-cap and flexi-cap funds are better suited for most investors in the current environment, where mid-cap and small-cap funds Already performed much better.” Jain, Research Analyst, ICICI Securities said in the report that infrastructure, PSUs, which were lagging behind in the initial part of the rally, have started gaining traction again.
new fund offerAccording to the report, equity oriented funds raised more than new fund offers (NFOs) 30,000 crore during May-September. Also, the inflow of equity funds has been dominated by NFOs over the past few months.
Exchange Traded Funds (ETFs): According to ICICI Securities, the AUM for the ETF has increased from Over 5,400 crores in December 2014 3.5 trillion currently. While the growth in ETFs is driven by institutional inflows in Nifty 50 led by EPFO and BSE Sensex ETF with CPSE ETFs, inflows from individual investors have also started gaining traction. “This trend of allocation to ETFs is on the rise and is likely to gain more traction. The ETF market is expected to grow due to continued thrust from the government and increasing acceptance of products like investment channels by the retail sector.”
counter-marketICICI Securities believes that the bond market remains in a wait and watch mode with some domestic MF managers raising liquidity levels in their actively managed debt funds. The yield of AAA-rated corporates declined significantly. “With the gross YTM of corporate bond funds around 5.5%, the attractiveness diminishes significantly,” it added.
Hybrid FundThe hybrid fund category is dominated by aggressive hybrid funds (erstwhile balanced funds) and balanced advantage or dynamic asset allocation funds.
The Balanced Advantage Fund category has been witnessing steady exposure over the past six months as many investors prefer to invest in dynamically managed equity funds.
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