KOCHI:
The equity mutual funds have witnessed a net inflows of Rs.20, 245.26 crore in August 2023, according to the Association of Mutual Funds in India (AMFI) data. The same AMFI data suggests within the equity mutual fund category, the small-cap category saw inflows of Rs 4,264.82 crore while sectoral/thematic funds saw inflows of Rs 4,805.81 crore and multi-cap category witnessed Rs 3,422.14 crore inflows. Overall the mutual fund industry in India reported total assets under management (AUM) of Rs 46.63 lakh crore i.e including the close-ended schemes as per the August AMFI data.
As the size of mutual funds (MF) assets grows in India, we find a pattern where a few states continue to prefer equity MF schemes over non- equity schemes. Investors in Kerala for example have shown an inclination for equity mutual funds over non-equity. According to the august AMFI data 69% of
the investments from the state of Kerala are parked in Equity schemes while 20% is parked in debt & liquid schemes and 9% in balanced funds. Investors in Kerala have parked almost Rs.56, 050.36 crore in mutual funds.
Tata Mutual Fund also sees a similar trend in Kerala, where Tata Mutual Fund investors have shown preference for equity mutual fund schemes. For Tata Mutual fund, almost 76% of AUM comes from equity schemes, 15% from debt & liquid schemes and 9% from balanced schemes in Kerala according
to August AMFI data.
Within the equity category, investors have shown inclination towards sectoral funds such as Tata Digital India Fund which is an open-ended equity scheme that invests in Information Technology sector and Tata India Pharma & Healthcare Fund which is an open ended equity scheme that invests in pharmaceutical and healthcare sector. It may be noted here that the Tata Digital India Fund and Tata India Pharma & Healthcare Fund fall under very high-risk category as both the funds fall under the category of the sectoral funds. We also feel that the investors are now inclined in the Focused Funds as a category.
According to Meeta Shetty, Fund Manager, Tata Asset Management, “At Tata Asset Management, our focus is on the investment process and disciplined approach to investing. We adopt the GARP (Growth at Reasonable Price) approach to investing across our MF schemes including sectoral funds and focused funds. The GARP approach allows us to bet on high quality shares and at the same time ensures that the quality shares are bought at reasonable price. We believe there are multiple opportunities at this point of time in the broad markets which can see strong growth as well as re- rating and we are trying to capture them in our Tata Focused Equity Fund. Focused fund being a limited stock portfolio (30 stocks) leads to slightly higher concentration by design, this helps us in improving the performance. We manage it via both top down as well as bottom-up approach. IT and the Pharma sector have also gone through course correction. Growth for the IT sector is almost at its decadal lows and we expect it to bounce back in the near to medium term. For the pharma sector, growth has finally shown some revival after a long challenging phase since 2015. We observe that both these sectors are trading closer to its long-term average”.
