When the market heads down, investors find themselves looking for ways to ease the suffering. But at this moment there seems to be no easing down the sufferings of the Indian investors. In the last two quarters of 2008, continuing volatility and short-term bearish outlook have seen a blood-bath on Indian bourses. With inflation inching close to 12%, investors are advised to stay away from the equity markets and invest in MFs, as it may help them in maximizing their returns.
It
is true, that during the time of turbulent markets and continuing
volatility, investors seek opportunities in MFs as they
provide an attractive and simple way of tapping the potential
investment options. But the slump in the markets and continuing
bearish tendencies have their effect on MFs too. The falling
indices have seen large-scale redemption from the Indian
MF industry. In this extreme, volatile market, fund managers
are churning their portfolios at a rate which the MF industry
has never seen before.
Buckling under the pressure of the melt-down in the stock market and the slow growth in the fixed income schemes, the Indian MF industry witnessed a 5.9% drop in its assets in June 2008 (See Table 1). At the end of June 2008, the combined average Assets Under Management (AUM) of the 33 fund houses in the country dropped to Rs. 5, 64,599.28 cr as compared to Rs. 6,00,266.32 cr in May 2008. Several fund houses have trimmed their exposure in equity markets and have increasingly turned to debt instruments. |
