{"id":1032,"date":"2019-09-12T05:42:15","date_gmt":"2019-09-12T05:42:15","guid":{"rendered":"http:\/\/blog.certifiedfinancialguardian.com\/?p=1032"},"modified":"2019-09-12T06:19:55","modified_gmt":"2019-09-12T06:19:55","slug":"investors-are-undeterred-to-market-volatility-to-continue-investing-in-equity-funds","status":"publish","type":"post","link":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/09\/12\/investors-are-undeterred-to-market-volatility-to-continue-investing-in-equity-funds\/","title":{"rendered":"Investors Are Undeterred To Market Volatility To Continue Investing In Equity Funds"},"content":{"rendered":"\n

September is here to remind us that we have\ncompleted 8-months of the calendar year 2019 and reflect to review the past\nperformance. It\u2019s time to take a closer look at past month\u2019s AMFI data which\nwas shared recently to understand the Mutual fund industry\u2019s progress so far. <\/p>\n\n\n\n

As per the data released, there has been a\nrise in a number of folios. The number of open-ended equity folios have risen\nto 59.8 million (5.9 crores) in August 2019 from 59.4 million (5.8 crore) in\nApril 2019, to push the overall count of a number of folios to 85.3 million (8.53 crore).<\/p>\n\n\n\n

Table 1: Monthly rise in No of folios<\/em><\/strong><\/p>\n\n\n\n\n \n \n\n\n\n
Month\n<\/td>\nApr-19\n<\/td>\nMay-19\n<\/td>\nJun-19\n<\/td>\nJul-19\n<\/td>\nAug-19\n<\/td>\n<\/tr>\n
Total no of folios\n<\/td>\n8.27\n<\/td>\n8.32\n<\/td>\n8.37\n<\/td>\n8.48\n<\/td>\n8.53\n<\/td>\n<\/tr>\n
no of debt folios\n<\/td>\n52\n<\/td>\n52\n<\/td>\n53\n<\/td>\n54\n<\/td>\n52\n<\/td>\n<\/tr>\n
no of equity folios\n<\/td>\n580\n<\/td>\n584\n<\/td>\n588\n<\/td>\n594\n<\/td>\n598\n<\/td>\n<\/tr>\n<\/tbody><\/table>\n\n\n\n

(Source: www.amfiindia.com<\/a>)<\/p>\n\n\n\n

 Net equity\ninflow for equity funds has surged by 12.3% on a month-on-month basis and by 9%\non a yearly basis. It indicates that despite the markets going through the\nchoppy waters, investors have not stopped adding equity into their portfolio.<\/p>\n\n\n\n

Graph 1: Net\nEquity Inflow (Rs in crore)<\/em><\/strong><\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

(Source: www.amfiindia.com<\/a>)<\/p>\n\n\n\n

Within the equity segment, the steep rise\nin the number of folios is attributed to a large part of inflows into large-cap\nfunds, multi-cap, mid-cap, and small-cap funds with an inflow of Rs 2582.97\ncrore, Rs 1,581 crore, 1,068 crore, and Rs 1,307 crore, respectively. There has\nbeen a growth of 57% over last month\u2019s inflows in small cap funds to increase\nthe overall count of open-ended equity inflows to Rs 9152 crore (as seen in the\ngraph below). <\/p>\n\n\n\n

Graph 2: Net inflow of open-ended equity (Rs in crore)<\/em><\/strong><\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

(Source: www.amfiindia.com<\/a>)<\/p>\n\n\n\n

Note: RHS includes overall open-ended\nequity inflow<\/p>\n\n\n\n

The investors are unperturbed when it comes to investing in equities even in economic slowdown now which shows the change in investment preference from the old form of investing. The \u2018Mutual fund sahi hai<\/a>\u2019<\/em> campaign has managed to increase the awareness among the masses. This has encouraged them to invest in various equity mutual funds diligently via systematic investment plans<\/a>. <\/p>\n\n\n\n

Graph 3: SIP Inflows (Rs in crore)<\/em><\/strong><\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

(Source: www.amfiindia.com<\/a>)<\/p>\n\n\n\n

In the graph above, from the SIP inflows that\ndropped marginally but still at elevated levels, it is evident that investors want\nto reap the benefit of rupee-cost averaging to reduce market volatility coupled\nwith the power of compounding to grow wealth over the long term. <\/p>\n\n\n\n

Even the debt funds saw good growth in the\nnumber of folios, with the maximum investments in Liquid funds, Ultra-short\nduration funds, money market funds, Corporate\nBond Funds, Banking and PSU funds, and Overnight funds. <\/p>\n\n\n\n

Despite the debt crisis leading to credit\ncrisis and losses experienced in the debt fund portfolios of investors. The\nbelow table shows a surge in the number of folios across various categories of\ndebt funds for the month of August when compared over 5 months, 3 months, and 1\nmonth. <\/p>\n\n\n\n

Table 2<\/strong>:  Number of open-ended debt folios and growth\nover past few months<\/em><\/strong><\/p>\n\n\n\n\n \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Open-ended Debt Schemes\n<\/td>\nAug-19\n<\/td>\n5-month growth\n<\/td>\n3-month growth\n<\/td>\n1-month growth\n<\/td>\n<\/tr>\n
Overnight Fund\n<\/td>\n27,066\n<\/td>\n27%\n<\/td>\n15%\n<\/td>\n7%\n<\/td>\n<\/tr>\n
Liquid Fund\n<\/td>\n1,642,412\n<\/td>\n13%\n<\/td>\n4%\n<\/td>\n2%\n<\/td>\n<\/tr>\n
Ultra-Short Duration Fund\n<\/td>\n638,945\n<\/td>\n8%\n<\/td>\n4%\n<\/td>\n2%\n<\/td>\n<\/tr>\n
Low Duration Fund\n<\/td>\n915,412\n<\/td>\n-1%\n<\/td>\n-1%\n<\/td>\n0%\n<\/td>\n<\/tr>\n
Money Market Fund\n<\/td>\n310,190\n<\/td>\n9%\n<\/td>\n6%\n<\/td>\n3%\n<\/td>\n<\/tr>\n
Short Duration Fund\n<\/td>\n284,565\n<\/td>\n8%\n<\/td>\n5%\n<\/td>\n3%\n<\/td>\n<\/tr>\n
Medium Duration Fund\n<\/td>\n227,175\n<\/td>\n-7%\n<\/td>\n-2%\n<\/td>\n0%\n<\/td>\n<\/tr>\n
Medium to Long Duration Fund\n<\/td>\n107,611\n<\/td>\n4%\n<\/td>\n3%\n<\/td>\n2%\n<\/td>\n<\/tr>\n
Long Duration Fund\n<\/td>\n24,038\n<\/td>\n29%\n<\/td>\n22%\n<\/td>\n8%\n<\/td>\n<\/tr>\n
Dynamic Bond Fund\n<\/td>\n213,482\n<\/td>\n0%\n<\/td>\n2%\n<\/td>\n1%\n<\/td>\n<\/tr>\n
Corporate Bond Fund\n<\/td>\n250,280\n<\/td>\n29%\n<\/td>\n19%\n<\/td>\n11%\n<\/td>\n<\/tr>\n
Credit Risk Fund\n<\/td>\n534,794\n<\/td>\n-7%\n<\/td>\n-3%\n<\/td>\n-1%\n<\/td>\n<\/tr>\n
Banking and PSU Fund\n<\/td>\n106,041\n<\/td>\n25%\n<\/td>\n16%\n<\/td>\n8%\n<\/td>\n<\/tr>\n
Gilt Fund\n<\/td>\n92,198\n<\/td>\n42%\n<\/td>\n25%\n<\/td>\n10%\n<\/td>\n<\/tr>\n
Gilt Fund with 10 yr constant duration\n<\/td>\n23,013\n<\/td>\n121%\n<\/td>\n58%\n<\/td>\n21%\n<\/td>\n<\/tr>\n
Floater Fund\n<\/td>\n138,704\n<\/td>\n4%\n<\/td>\n3%\n<\/td>\n3%\n<\/td>\n<\/tr>\n<\/tbody><\/table>\n\n\n\n

(Source: www.amfiindia.com<\/a>)<\/p>\n\n\n\n

And in terms of outflows\/inflows credit\nrisk funds saw heavy outflow of Rs -2,269.64 crore and the least amount of\noutflow was seen for Medium to Long Duration Funds.<\/p>\n\n\n\n

Table 3<\/strong>:  Net Inflow (+ve)\/ Outflow (-ve) over past few months (Rs in crore)<\/em><\/strong><\/p>\n\n\n\n\n \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Open ended debt Schemes\n<\/td>\nApr-19\n<\/td>\nMay-19\n<\/td>\nJun-19\n<\/td>\nJul-19\n<\/td>\nAug-19\n<\/td>\n<\/tr>\n
Overnight Fund\n<\/td>\n96\n<\/td>\n2347\n<\/td>\n-4063\n<\/td>\n6021\n<\/td>\n-503\n<\/td>\n<\/tr>\n
Liquid Fund\n<\/td>\n89778\n<\/td>\n68583\n<\/td>\n-152432\n<\/td>\n45441\n<\/td>\n79428\n<\/td>\n<\/tr>\n
Ultra-Short Duration Fund\n<\/td>\n11037\n<\/td>\n1191\n<\/td>\n-1926\n<\/td>\n601\n<\/td>\n2829\n<\/td>\n<\/tr>\n
Low Duration Fund\n<\/td>\n4913\n<\/td>\n-2353\n<\/td>\n-4689\n<\/td>\n-223\n<\/td>\n794\n<\/td>\n<\/tr>\n
Money Market Fund\n<\/td>\n6419\n<\/td>\n3896\n<\/td>\n-3832\n<\/td>\n5063\n<\/td>\n3765\n<\/td>\n<\/tr>\n
Short Duration Fund\n<\/td>\n2771\n<\/td>\n-1316\n<\/td>\n-607\n<\/td>\n586\n<\/td>\n994\n<\/td>\n<\/tr>\n
Medium Duration Fund\n<\/td>\n-531\n<\/td>\n-2063\n<\/td>\n-1159\n<\/td>\n937\n<\/td>\n-561\n<\/td>\n<\/tr>\n
Medium to Long Duration Fund\n<\/td>\n264\n<\/td>\n387\n<\/td>\n-156\n<\/td>\n-60\n<\/td>\n-28\n<\/td>\n<\/tr>\n
Long Duration Fund\n<\/td>\n8\n<\/td>\n90\n<\/td>\n22\n<\/td>\n59\n<\/td>\n11\n<\/td>\n<\/tr>\n
Dynamic Bond Fund\n<\/td>\n412\n<\/td>\n-651\n<\/td>\n-786\n<\/td>\n-122\n<\/td>\n-67\n<\/td>\n<\/tr>\n
Corporate Bond Fund\n<\/td>\n3874\n<\/td>\n1430\n<\/td>\n-131\n<\/td>\n2573\n<\/td>\n3578\n<\/td>\n<\/tr>\n
Credit Risk Fund\n<\/td>\n-1253\n<\/td>\n-4156\n<\/td>\n-2695\n<\/td>\n-3411\n<\/td>\n-2270\n<\/td>\n<\/tr>\n
Banking and PSU Fund\n<\/td>\n2792\n<\/td>\n3382\n<\/td>\n799\n<\/td>\n5914\n<\/td>\n2769\n<\/td>\n<\/tr>\n
Gilt Fund\n<\/td>\n-41\n<\/td>\n-45\n<\/td>\n197\n<\/td>\n-120\n<\/td>\n307\n<\/td>\n<\/tr>\n
Gilt Fund with 10 yr constant duration\n<\/td>\n33\n<\/td>\n-61\n<\/td>\n45\n<\/td>\n80\n<\/td>\n40\n<\/td>\n<\/tr>\n
Floater Fund\n<\/td>\n348\n<\/td>\n233\n<\/td>\n64\n<\/td>\n381\n<\/td>\n40\n<\/td>\n<\/tr>\n
Total\n<\/td>\n120920\n<\/td>\n70894\n<\/td>\n-171349\n<\/td>\n63719\n<\/td>\n91127\n<\/td>\n<\/tr>\n<\/tbody><\/table>\n\n\n\n

(Source: www.amfiindia.com<\/a>)<\/p>\n\n\n\n

As per reporting by the Livemint, Mr N.S.\nVenkatesh, chief executive, AMFI said, \u201cMutual\nfund inflow is critical to maintain buoyancy in the stock markets with foreign\ninstitutional investors (FIIs) continuously selling Indian shares due to a host\nof reasons ranging from macro headwinds to taxation woes. In August, FIIs\ndumped $2.20 billion of Indian shares in the worst sell-off in 10 months, while\ndomestic institutional investors (DIIs), including mutual funds and insurance\ncompanies, pumped in Rs20,933.59 crore.<\/em><\/p>\n\n\n\n

The\nNational Stock Exchange\u2019s India VIX index, or fear index, which tracks\ninvestors\u2019 perceptions of volatility, rose nearly 20% in August. Elevated\nlevels of VIX indicate that investors are expecting correction at least over\nthe next month.<\/em><\/p>\n\n\n\n

However,\nwill continue to witness robust flows and, on the debt side, liquid funds may\nsee volatility owing to quarter-end phenomenon.<\/em>\u201d <\/p>\n\n\n\n

In conclusion, PersonalFN is of the view\nthat investors are becoming smarter and wiser in terms of the investment\ndecisions for their long-term benefit.<\/p>\n\n\n\n

But when the markets are volatile, going\ngung-ho and investing heavily in extremely risky equity funds can be hazardous\nfor the investors’ portfolios. <\/p>\n\n\n\n

One should aim to create a diversified robust portfolio based on Core and Satellite<\/a> approach of investing that will mitigate the market undercurrents. <\/p>\n\n\n\n

However, remember to have a clear investment objective in mind, know your financial goals<\/a>, risk profile, and the time horizon you have for each financial goals before you invest your hard-earned money. Accordingly, you need to invest based on your personalised asset allocation and choose the fund based on the qualitative and quantitative parameters.<\/p>\n\n\n\n

Prudent investing and financial discipline are vital measures to take for your long-term financial well-being. <\/p>\n\n\n\n

This article first appeared on PersonalFN here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

September is here to remind us that we have completed 8-months of the calendar year 2019 and reflect to review the past performance. It\u2019s time to take a closer look at past month\u2019s AMFI data which was shared recently to understand the Mutual fund industry\u2019s progress so far. As per the data released, there has…<\/p>\n","protected":false},"author":4,"featured_media":1036,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cybocfi_hide_featured_image":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/1032"}],"collection":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/comments?post=1032"}],"version-history":[{"count":5,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/1032\/revisions"}],"predecessor-version":[{"id":1041,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/1032\/revisions\/1041"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/media\/1036"}],"wp:attachment":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/media?parent=1032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/categories?post=1032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/tags?post=1032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}