Notwithstanding the bloodbath in the equity markets, five new fund offers of mutual funds will open for subscription this week. Among them, there will be three passively managed funds of HDFC MF, Bandhan MF, Birla MF and two thematic funds of Motilal Oswal MF and Bank of India MF.
Of late, most of the mutual funds are building their passive offerings to attract new investors interested in equity investment after observing sharp run in equity indices.
The HDFC Nifty500 Multicap 50:25:25 Index Fund will open for subscription on Tuesday. The fund will track its Nifty500 Multicap 50:25:25 Index and is suitable for investors seeking returns commensurate to the benchmark index.
Riding on the booming defence sector, Birla MF will launch Nifty India Defence index fund on Thursday and will be benchmarked against the Nifty India Defence TRI while the NFO of Bandhan Nifty Bank Index will open for subscription on Thursday and will be benchmarked against the Nifty Bank Index.
Business cycle
Motilal Oswal and Bank of India MF will launch their business cycle on Wednesday and Friday. The business cycle funds will aim to achieve long term capital appreciation by predominantly investing in equity and equity-related instruments.
The thematic actively managed business cycle funds use the discretion of fund managers to make investments based on their analysis of economic indicators and business cycle trends.
Anand Varadarajan, Business Head, Tata Asset Management Company said investors should use their discretion while investing in NFOs based on their risk appetite and the valuation of stocks covered in the schemes they are investing as there are too many moving parts driving the market. Existing mutual fund investors may use this opportunity to invest in Balanced Advantage, multi-asset and large-caps to diversify, he said.
The rise in interest rate in Japan has wiped off last one year’s earning in those markets while there are fears of a possible recession in the US. However, the domestic economic growth fundamentals are strong while there can be an impact on export-oriented sectors, he added.
On the recent market crash, A Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC, said remaining confident in their long-term strategies, investors should use the current market conditions to strengthen their investment positions and view the market downturns as an opportunity to focus on broader investment horizon.
Investors should continue their systematic investment plans to build a resilient portfolio with investment horizon of 10-15 years by leveraging on the solid fundamentals of the Indian economy, he said.