Mutual Fund Readings: Q1 returns, Buying ‘below par’, AUM drop
The Jan-March quarter normally sees investors searching for tax-saving funds. But such funds have continued their indifferent run. No tax-saving fund has beaten the Sensex or the Nifty in returns this quarter. The main reason for this underperformance is that such funds have packed their portfolios with mid-cap stocks (less than Rs 7,500-crore market capitalisation).
Only four infrastructure funds of the 14 fell less than the BSE Capital Goods index, which dipped 29%. Prominent out-performers were Reliance Diversified Power Sector and ICICI Pru Infrastructure.
. . . now that the markets have been falling for sometime, selling mutual funds on the same pretext as when the markets were going up is not possible anymore. So, mutual fund distributors have started resorting to a new set of tricks to con the investor, the latest being “below par NAV.”
Now that the markets are not doing well and the NAVs of diversified equity schemes have fallen significantly, some distributors are suggesting they move their investments into debt schemes. And these are the same guys who till sometime back got us to invest in diversified equity mutual funds on the pretext that equity investments should be for the long term!
- Business Standard: Mutual funds` AUM dips 9% in March
The assets under management of the mutual fund industry witnessed a sharp decline of 8.93 per cent in March at Rs 5,14,617 crore at the end of month, according to data from the Association of Mutual Funds in India (AMFI).
An amount of Rs 50,000 crore-plus is estimated to have gone towards advance tax payment and there was also a demand by banks to shore up their assets.
Not the best of times for brokerages & AMCs.
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