Mutual funds have seen unprecedented inflows in the year so far, with Rs 96,000 crore invested into them in the first seven months of the ongoing financial year. While this may seem eye-popping, many experts point the flows are expected to swell even further, given that retail investors are now investing into mutual funds like never before. Many top experts and research firm alike have pointed out to this financialisation of savings. A recent report by Deutsche Bank underscored how the rising component of Systematic Investment Plans (SIPs) is changing the profile of Indian savings towards equity investments.
“The accelerating momentum of inflows into the equity schemes of mutual funds indicates that the financialisation of the domestic savings cycle in India — which began in earnest in 2014 — is becoming deeply entrenched,” Deutsche Bank said in a research note. How long is it likely to sustain? India’s Warren Buffett is bullish on the whole “financialisation of savings theme” and says that Indian money into the market is going be a tsunami! “I think it’s not even reached a flood,” Rakesh Jhunjhunwala told CNBC TV18 in a recent interview. While investors may be looking at various options to play on this theme, we bring you two top rated banking and financial services mutual funds which have returned more than 40% since January.
Aditya Birla Sun Life Banking and Financial Services Fund
This fund has returned nearly 45% since January. Notably, its a Value Research five-star rated fund and has been a consistent outperformer in its category in the one-year and three-year periods. “The primary investment objective of the scheme is to generate long-term capital appreciation to unit holders from a portfolio that is invested predominantly in equity and equity related securities of companies engaged in banking and financial services,” reads the investment objective of the fund. The fund has taken huge exposure to the stocks of private sector banks such as ICICI Bank, HDFC Bank, IndusInd Bank and Yes Bank with over 32% of the total assets invested into these shares. The fund has an expense ratio of 1.15% as on Oct 31, 2017.
Invesco India Banking Fund
The fund has returned more than 43% in the year so far. Notably, its a Value Research four-star rated fund and has been a consistent outperformer in its category in the one-year and three-year periods. “To generate long-term capital growth from a portfolio of equity and equity-related securities of companies engaged in the business of banking and financial services,” reads the investment objective. The fund has invested more than half of its assets into the shares of private banks such as HDFC Bank, ICICI Bank and IndusInd Bank. he fund has an expense ratio of 1.03% as on Oct 31, 2017.