Actively run large cap funds have been widely criticised over the past few years for their underperformance. These have lagged behind their indices, and have been trumped by low-cost index-based offerings. But after a long time, several funds languishing at the bottom of the performance charts have staged a comeback. Until two months ago, the top performing fund in the large-cap category were all passive funds, bar one. Currently, six of the top 10 performers over one year are active funds. From a one-year return perspective, Axis Bluechip, BNP Paribas Large Cap, LIC MF Large Cap, JM Core 11, DSP Top 100 Equity and Canara Robeco Bluechip Equity are all placed ahead of their index-based peers from the large-cap segment. Only Axis Bluechip was holding ground until a few months ago. While this reversal in fortunes is heartening, it is too early to say something, reckon experts. The number of outperforming active large cap funds—as a proportion of total schemes in the … [Read more...] about Are active large cap mutual funds making a comeback?
Frost total return bond fund
By John Gittelsohn and Charles Stein U.S. stocks are looking scary after their worst year in a decade. Credit is risky too. Volatility is back. For many, cash and short-term debt may be the best place to go. As fund company executives, portfolio managers and strategists at some of the world’s biggest money managers turn to 2019, they’re cautioning that returns could be muted across asset classes. They’re also urging investors to be increasingly selective in the quest for value. Here’s a sampling of views. Jurrien Timmer, Fidelity Investments, director of global macro U.S. earnings growth will slow to 5 percent to 7 percent in 2019, the Fed may raise rates once or twice more, and the price-earnings ratio of the stock market will start the year at a reasonable point. Bonds look all right in this environment. Stocks should do better than they did in 2018. The best opportunity should be in emerging market stocks, which have lagged far behind their U.S. … [Read more...] about BlackRock, Capital Group and Pimco fund managers list biggest risks for markets
Mumbai: The country’s largest insurer Life Insurance Corp. (LIC) of India invested Rs 1000 crore in Tata Capital Housing Finance (TCHF) amid signs of improving debt market sentiment, three people with the direct knowledge of the matter said. More than a year ago, infrastructure conglomerate IL&FS triggered a crisis of capital that kept the largest domestic institutional investor away from taking usual bets on privately held companies. “The issuer wanted to raise up to Rs 1500 crore, but it closed subscriptions with the single large investor,” said one of the persons cited above. The company directly placed those bonds with LIC. Those bonds offered 8.35 per cent with staggered maturities up to 10 years. The rate is 183 basis points higher than the benchmark yield. A basis point is 0.01 percentage point. “TCHFL raises funds from time to time for its business operations. As part of this fund raising, it received a bid of Rs 1000 crore for a 10 year … [Read more...] about Tata Capital Housing Fin places bonds with LIC, raises Rs 1,000 crore
Global investors appear to have turned apprehensive about Bharti Airtel’s ability to repay debt amid growing concern over stress in the local telecom sector. The company’s offshore perpetual bond yields surged more than 200 basis points, pulling down prices from their October 7 launch levels as the debt papers changed hands in the secondary market. The bonds were sold with a coupon of 5.65% and now yield 7.73%, dealers said. Asset managers, insurance companies, pension funds and banks across Europe, Asia and the US picked up the bonds. US Treasury benchmark yields, a key global gauge, rose 10 basis points in the past one month. The perpetual bonds are a quasiequity obligation without a fixed maturity and had a five and a half year non-call period, which means the debt cannot be repaid before this period. ET could not ascertain the buyers and sellers in the secondary market transactions. “Our perpetual bonds were issued by our subsidiary in Mauritius and are … [Read more...] about Airtel’s global bond yields spike on concerns over telecom stress
The cut in corporate tax rate should boost earnings across companies resulting in improved earnings per share. This is due to three factors: One, pricing power or market share, which is related to the size of a company. Second, lower the tax outgo higher the savings, which will directly translate into earnings. Third, if such companies pass on the benefit of tax savings or increase prices of their products, their earnings would increase from present levels. The large-and-mid-cap universe has a large number of companies that are currently taxed at higher than the new effective rate of 25.17 per cent. Hence, investing in equity mutual fund schemes with exposure to large-and-mid-sized companies can generate superior returns, riding on this wave of growth. ET recommends the five best performing schemes that are invested in large-and-mid-sized companies: Mirae Asset Emerging Bluechip Fund Fund Manager: Neelesh Surana, Ankit Jain AUM: Rs 7,759 crore 3 / 5 year return: 12.4 per cent /16 per … [Read more...] about Five equity mutual funds primed for alpha from FM’s tax stimulus