Investors in technology funds earned the highest returns in a year of new highs for both mutual fund assets and stock market indices.
A mix of mean reversion and the defensive nature of the sector helped the category average returns to rise to 26.48 per cent.
Vidya Bala, head-mutual fund research, FundsIndia said that the sector tends to do well during periods of market turbulence. After rising 23 per cent since the start of the fiscal to its all-time high of 36,444 in January 2018, the S&P BSE Sensex has dropped to 32,969 now.
“The returns also look better because of underperformance (of technology sector) during the calendar year 2017,” she said.
Schemes investing in another defensive play, the fast moving consumer goods (FMCG) sector, ranked second delivering 20.15 per cent, according to data from Value Research. Riskier small cap funds, though they gave up some of their gains, are still ranked third with an average category return of 17.53 per cent.
Pharma, with -7.56 per cent average category returns, is the only one to be in the red. The sector has been dealing with increased scrutiny from the US FDA, and domestic disruption following the introduction of the Goods and Services Tax.
Credit opportunity funds had the highest average category returns (7.46 per cent) in the debt category. All other categories have given positive returns, helping the mutual fund industries’ assets under management (AUM) to swell to over Rs 22 trillion as of February 2018. The industry’s AUMs hit an all-time high of Rs 22.8 trillion in November. More of the growth is also now coming from outside the top 15 cities (B-15). The AUM from B-15 cities rose 41.7 per cent to Rs 4.36 trillion in February 2018 over February 2017. The industry as a whole only grew at 25.3 per cent.
Equity funds in particular have been the beneficiary of overall inflows.
Market scorecard: Technology funds top return charts, assets hit a new high This is despite changes such as the government’s Union Budget announcement of a 10 per cent long term capital gains tax on all equity holdings, including those held through mutual funds. While the market corrected on account of this, the impact on investor flows seems to have been limited. Investors pumped in Rs 162.68 billion into equity funds in February. Much of the flows have also come in through regular, rather than lump sum investments.
Over 20 million systematic investment plans (SIPs) pumped in Rs 64.25 billion into mutual fund schemes in February. This takes the average monthly SIP flows during the financial year until February to Rs 54.61 billion, an increase of 51.75 per cent over Rs 35.99 billion seen over the same period last year.
The Indian investor seems to be more willing to consider financial assets and growth for the mutual fund industry seems likely to continue despite issues like the long-term capital gains tax, according to Kaustubh Belapurkar, Director, Fund Research, Morningstar Investment Adviser India.
“The numbers have held up,” he said.
Market scorecard: Technology funds top return charts, assets hit a new high
A mix of mean reversion and the defensive nature of the sector helped the category average returns to rise to 26.48 per cent.
Vidya Bala, head-mutual fund research, FundsIndia said that the sector tends to do well during periods of market turbulence. After rising 23 per cent since the start of the fiscal to its all-time high of 36,444 in January 2018, the S&P BSE Sensex has dropped to 32,969 now.
“The returns also look better because of underperformance (of technology sector) during the calendar year 2017,” she said.
Schemes investing in another defensive play, the fast moving consumer goods (FMCG) sector, ranked second delivering 20.15 per cent, according to data from Value Research. Riskier small cap funds, though they gave up some of their gains, are still ranked third with an average category return of 17.53 per cent.
Pharma, with -7.56 per cent average category returns, is the only one to be in the red. The sector has been dealing with increased scrutiny from the US FDA, and domestic disruption following the introduction of the Goods and Services Tax.
Credit opportunity funds had the highest average category returns (7.46 per cent) in the debt category. All other categories have given positive returns, helping the mutual fund industries’ assets under management (AUM) to swell to over Rs 22 trillion as of February 2018. The industry’s AUMs hit an all-time high of Rs 22.8 trillion in November. More of the growth is also now coming from outside the top 15 cities (B-15). The AUM from B-15 cities rose 41.7 per cent to Rs 4.36 trillion in February 2018 over February 2017. The industry as a whole only grew at 25.3 per cent.
Equity funds in particular have been the beneficiary of overall inflows.
Market scorecard: Technology funds top return charts, assets hit a new high This is despite changes such as the government’s Union Budget announcement of a 10 per cent long term capital gains tax on all equity holdings, including those held through mutual funds. While the market corrected on account of this, the impact on investor flows seems to have been limited. Investors pumped in Rs 162.68 billion into equity funds in February. Much of the flows have also come in through regular, rather than lump sum investments.
Over 20 million systematic investment plans (SIPs) pumped in Rs 64.25 billion into mutual fund schemes in February. This takes the average monthly SIP flows during the financial year until February to Rs 54.61 billion, an increase of 51.75 per cent over Rs 35.99 billion seen over the same period last year.
The Indian investor seems to be more willing to consider financial assets and growth for the mutual fund industry seems likely to continue despite issues like the long-term capital gains tax, according to Kaustubh Belapurkar, Director, Fund Research, Morningstar Investment Adviser India.
“The numbers have held up,” he said.
Market scorecard: Technology funds top return charts, assets hit a new high
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