However, many investors booked profits on their investments,thereby resulting in a decline in net inflows in equity dedicated mutual funds. For the month of October 2019, equity dedicated mutual funds saw a net inflow of ₹6,026 crore, which is a decline of 9 per cent sequentially and is also a five month low net inflow figure. Against this backdrop, Exchange Traded Funds (ETFs) saw a significant jump in inflows for the same period. From ₹1,521 crore of inflows in the month of September, the inflows in ETFs jumped fourfold to ₹6,682 crore in the month of October. One of the reasons for such increase is funds was deployment from Employees’ Provident Fund Organisation (EPFO) into appointed fund houses. At present, the EPFO is only allowed to make equity investments through passively-managed ETFs.
Apart from EPFOs, passive investment has been and is being popularly followed by various investor profiles. Investing in an index ETF, whose portfolio plainly mimics the composition of an index, is an example of passive investment as the investment does not call for any research and analysis to pick stocks. Like in the case of various developed markets, India may follow the popularity of passive investments; however, there are some misconception and lack of understanding about an ETF (a popular and common vehicle of passive investing), which is deterring some investors, especially retail investors. The point of confusion is many investors believe that since individual stocks and ETFs have many similarities, they might be sharing similar liquidity traits. Therefore, liquidity of the ETF is determined in a similar manner as liquidity of stocks. Nonetheless, ETFs are fundamentally different from stocks and have robust liquidity characteristics, which is frequently misunderstood.
Liquidity in ETF
Denne historien er fra November 25 - December 8, 2019-utgaven av Dalal Street Investment Journal.
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Denne historien er fra November 25 - December 8, 2019-utgaven av Dalal Street Investment Journal.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
