Kudva, speaking on the sidelines of a seminar organised by Indian merchants chamber, said debt based instruments was the favourites of mutual fund houses as the interest rates were coming down in the last two years.
But the scene is now changing with interest rates going up. Now mutual funds are shifting to equity based fund to capitalise the prevailing situation, she said.
She said that there is boom in equity market essentially driven by the strong fundamentals and companies making good profits.
Moreover, foreign institution investors are also pumping in more funds into India. As the buoyancy in the equity market is expected to continue, mutual funds will opt equity funds route, Kudva added.
PNB AMC Pvt Ltd deputy chief investment officer Binay Chandgothia said the interest rates is expected to remain stable in next fiscal. There are no indications for change in interest rates. A stable rate regime is expected, he said.
Reliance mutual funds chief investment officer K Rajagopal added that interest rate would remain stable as they are linked with inflation, liquidity and credit growth.