In any industry, the rights of the buyer must be protected. In case of the financial services industry, especially for businesses that deal with retail money, investor protection becomes paramount. Inarguably, having your ‘skin in the game’ or ‘putting your money where your mouth is’ has proved to be an effective tool in increasing accountability and ensuring that the intent of investment professionals is well-aligned with those of investors. To that extent, the recent Sebi circular is on point - in spirit and intent. However, there are several layers to this circular which could have widespread ramifications. Many of these do not serve the intent and can be detrimental to the industry and the professionals who work in it.
SEBI’s debt norm: 36 mutual fund schemes hold over 10% of AT1 bonds
March 15, 2021
New guideline to come into effect from April 1 Thirty six schemes of 13 mutual funds have breached the SEBI cap of 10 per cent per scheme in debt securities (primarily additional tier-I and AT-II bonds) with special features.
Banking and public sector undertaking fund category has the highest number of seven schemes exceeding the 10 per cent cap in such securities. It is followed by the credit risk fund (five), medium duration (four), medium to long duration funds (four) and dynamic bond fund (three) categories also have excess investment in AT1 bonds, according to a Crisil Research report.
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Mid-cap mutual funds are expected to make solid gains: Why you should be picky while selecting schemes
Synopsis
Even with fund managers hunting within the confines of this narrow market cap band of Rs 10,000-Rs 30,000 crore, there is wide variation of quality within this basket. Some funds prefer to tilt towards larger mid-caps while some hunt much lower down the market cap ladder. Some funds diversify heavily to mitigate risk while a few take concentrated bets.
Mid-cap stocks made solid gains in 2020 and many expect this run to continue over the next 6-12 months. Funds investing in this space will ride this uptick, but simply chasing the category table toppers is not the right approach. Investors should take cognizance of aspects beyond mere returns.
Outflow from equity MF schemes continue for sixth month in a row
January 08, 2021
Investors pull out ₹36,000 crore from equity schemes in last six months
Outflow from equity schemes of mutual funds continued for the sixth month in a row in December on the back of profit-booking by investors as markets hit a record high.
Equity mutual funds registered an outflow of ₹10,147 crore in December against ₹12,917 crore logged in November, as per data released by Association of Mutual Funds in India. All equity schemes except for Dividend yield and thematic funds recorded an outflow last month.
The highest outflow of ₹3,876 crore and ₹3,540 crore was logged by large-cap and multicap funds. This was followed by an outflow of ₹1,641 crore and ₹1,636 crore in value and mid-cap funds.