As equity mutual funds see higher income streams, what should MF investors do? | Jobs Vox


Equity funds saw high returns as investors poured in large amounts during the market downturn. Retail investors have consistently demonstrated investment maturity over the past few years, with lower levels of income at higher market levels.

Investors have been betting big on strategic investment plans or SIPs to generate long-term wealth. The Mutual Fund (MF) Industry is set to peak in October 2022. 39.5 lakh crore from 38.4 lakh crore by September 2022. The increase in AUM was primarily due to equity-oriented funds showing gains in the market.

In the year Investors used it as an opportunity to get high volumes as equity markets saw a sharp fall in September 2022, due to low returns in October, brokerage ICICI Securities said in a note.

Large-cap funds rebounded sharply from September lows and mid- and small-cap funds underperformed, leading select large-cap stocks to rally in the markets.

After bank funds underperformed in September, pharma funds underperformed the rally in October/November. Midcap and small cap funds underperformed in October/November as the recent recovery in markets was not broad-based and supported by global returns and large cap stocks such as IT and banks.

The performance of value/contrast funds has rebounded as the sector’s stock-specific rotation has seen investors buy stocks with underperforming stocks, the note said.

Investors should still be cautious when investing in duration funds, although the actual rating on bonds is still well below the historical average, but medium-term bonds (three to five years) offer a good investment opportunity. Investors may start allocating their long-term debt allocations to short/medium-term debt funds,” advised ICICI Securities, adding, “Stock markets are recovering almost all their losses and trading at their previous highs. At current levels, buy with dips allocation strategy rather than lumpsum.

The opinions and recommendations presented above are those of individual analysts or distributor companies and not of Mint.

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