The year 2019 saw many new themes coming out of the mutual fund industry. Be it new thematic/sector funds or funds based on new processes or funds taking the passive investment route, the industry saw the emergence of a few new themes in 2019. In this article we take a look at a few new themes that have sprang up from mutual funds this year, and how they have played out so far for the fund houses. 1. Quant funds: Quant funds work on a mathematical model. The approach relies on a mix of quantifiable parameters to identify the right stocks at the right time. Quant investing aims to remove the fund manager bias from the process. Each quant fund follows its own set of rules to identify stocks. Different quant funds can have different set of rules to do so. Many fund houses, including DSP Mutual Fund, Nippon India Mutual Fund and Quant Mutual Fund, came up with different versions of this theme in their schemes. “We believe that the Indian market is ripe for such strategies as … [Read more...] about Quant, ESG, Index: mutual fund themes that came up in 2019
Index funds vs mutual funds
Mutual funds are contesting the insider trading charges by Securities and Exchange Board of India (Sebi) against them for trades in Manappuram Finance, said three people privy to the development. The capital markets regulator had sent show cause notices to nine entities including SBI Mutual Fund and Aditya Birla Sun Life Mutual Fund for trading shares of Manappuram based on a research report published by brokerage Ambit Capital. The report allegedly contained unpublished price sensitive information (UPSI) based on which the fund houses took trading calls. Ambit has resolved the issue through the consent route by paying fees of Rs 5 crore to Sebi. Consent is a route through which an accused can settle the case by paying fees without admitting or denying any wrong doing. The case pertains to a discussion that Manappuram management had with Ambit on March 18, 2013 after which the broker changed the rating on the stock from ‘Buy’ to ‘Under review’. The firm … [Read more...] about Mutual fund houses contest insider trading charges in Manappuram case of 2013
With benchmark indices trading at all-time highs with lofty valuations, fund managers believe there are a couple of ways to pick good stocks. One is to follow the value investing principle. The other one is to buy shares of companies where there are signs of an operational recovery. These factors have played an important role in fund managers’ stock picking in November, when lump sum flows into the industry slowed while SIPs remained robust. Here are some stocks bought by leading asset managers: Shree Cement CMP: Rs 20,373 Market-Cap: Rs 73,507 crore Bought by: Aditya Birla SL MF Among the top five players by capacity, Shree Cement has consistently shown its distinctness in its operations through timely expansion and cost control. A combined impact of these two factors has helped the company record highest Earnings before Interest Depreciation Tax and Amortisation (EBITDA) on selling a tonne of cement even in the second quarter— which is seasonally not so favourable in … [Read more...] about Mutual funds bet big on value, recovery themes
Should I redeem my investments from Nippon India Large Cap Fund and Invesco India Contra Fund, and invest the money in Axis Bluechip Fund? I am also concerned about my investments in Franklin India Smaller Companies Fund, Nippon India Small Cap Fund, and HDFC Small Cap Fund. Should I redeem the investments and invest the money in Axis Small Cap Fund, the best performer in the small cap category. --Avinash Parwani Prableen Bajpai, Founder & Managing Partner, Finfix Research & Analytics, responds: You have not mentioned the amount, mode of investment (lumpsum or SIP), and period for which you had invested in these schemes. Moving in and out of schemes based on their short-term performance is not the right thing to do. Both Nippon India Large Cap Fund and Invesco India Contra Fund are decent schemes. Do not redeem them based on their short-term underperformance. You are also investing in three small cap funds, which belong to the high-risk category. Having multiple schemes from … [Read more...] about Should I sell my existing small caps and invest the money in Axis Small Cap Fund?
Mumbai: Distressed asset funds may make a beeline for India following a recent Supreme Court order upholding the primacy of secured creditors in the Essar Steel case. While Lone Star, Cerberus, Brookfield and Varde Partners may ramp its India investments, New-York based Blue-Mountain Capital is thinking of investing in Indian assets, experts said. India’s apex court recently paved the way for global steel giant ArcelorMittal to take over Essar Steel after it upheld the primacy of financial creditors in the distribution of funds received under a corporate insolvency scheme. The judgment gave clarity to the implementation of the insolvency law. It also raised expectations that deal activity by global sponsors specialising in stressed assets may rise. Several specialised players may either look for an India entry or set up their own platforms in India. “Certainly, IBC is becoming a mature law and clarity is being provided to distressed asset investors through landmark … [Read more...] about More distressed asset funds may enter India now