Reeling under the pressure of high inflation and volatile markets, mutual funds are looking at sectors like IT, pharmaceuticals, FMCG and capital goods for investments.
At present, the mutual funds business has slowed down than it was five years back, owing to the unstable market, said Sanjay Prakash, chief executive officer of HSBC Asset Management (India) Pvt Ltd. The subscription has gone down too, he added.
“This year our subscription has gone down by 50% than last year,” he told FE .”We are underweight in the banking and realty sector as they are interest-sensitive.”
But the FMCG sector is doing very well. It will take another two quarters for the market to stabilise and the subscription to gain momentum, said Prakash.
Total asset under management is Rs 17,000 crore and the company plans to launch 5-7 domestic and international products in the current fiscal. “We could have done much better than this amount if the market was stable,” claimed Prakash. “Now we are just waiting for the markets and sentiments of investors to stabilise for launching the products.”
When contacted Anup Maheshwari, executive vice president (head of equities & corporate strategies) of DSP Merrill Lynch Fund Managers Ltd, he told FE ,”We are underweight in the realty sector and it will take some time for us to overcome the difficulty due to the volatile market condition.” At present, the Rs 20,000 crore company is preferring sectors like IT, pharmaceuticals and FMCG, he said.
Bharti AXA Investment Managers Pvt Ltd, set up in 2007, is also facing the same problem ‘as this is an interest sensitive sector,’ said Sujoy Das, head of fixed income of the multi-expert asset management company. When asked about the kind of products customers should go for the time being, he said liquid funds, fixed maturity funds and cash funds are good to invest in.
The company has launched a liquid fund in July and has plans to launch fixed maturity plans in the current fiscal. In this volatile market, investors should go for short-term investments and by November-December, when the interest rates will come down, investors should think about long-term investments, he said.