The recent market volatility has forced the retail investors to change their investment strategy. Investors have been seen shifting their investment focus from initial public offerings (IPOs) and participating in the direct equity markets to the new fund offerings (NFOs) made by Mutual Funds (MFs).
According to market sources, Reliance Mutual Fund has mopped up around Rs 5,660 crore through its NFO Reliance Natural Resources Fund. This makes it the second largest mobilisation ever in the history of the Indian MF history. This ranks after Reliance Equity Fund which has mobilised Rs 5,700 crore.
Interestingly, the NFO offered by the other fund houses have also received a good response. This is also being seen as a reason to force mega companies to withdraw their initial public offer. Wockhardt and Emaar MGF were forced to scrap their IPOs of Rs 1,000 crore and Rs 5,500 crore respectively.
Commenting on the performance of the NFOs and the non-performance of IPOs, Vikrant Gughanani, CEO, Reliance Mutual Fund said that the retail investors did not want to take any risk by participating in the present volatile equity market. The NFO has mopped up resources from 1,200 cities helping the fund houses to cross the 60 lakh folio mark. “A large number of retail investors have invested in the NFO”, he said.
According to the market sources, Reliance MF targets to touch an Asset Under Management (AUM) sum of Rs 90,000 crore, through the NFO and from the existing schemes, from the present AUM of Rs 77,210 crore.
Among other NFOs, according to the market reports, Birla Sun Life Mutual Fund?s NFO, Special Situation Fund has mobilised more than Rs 1,000 crore. The NFO of AIG Investments? infrastructure and economic reform fund and HDFC?s Infrastructure Fund, are also getting good response from the market.