INSUBCONTINENT EXCLUSIVE:
Across the mutual fund industry, scheme re-categorisation is on in full swing
There will be increased pressure on fund houses and distributors for some time now, as the rebranding and remarketing activity will begin to
Kotak Mutual fund has already begun to send out necessary communications in this regard and more will be on its way
Distributors have a task
cut out in the coming months
Re-categorisations, mergers, name changes, and/or fundamental attribute changes, in many cases, will make past performances of many major
In such a backdrop, the partners may need to find more qualitative insights to assess funds than looking just at past track
record.
Thankfully, at our end, the changes are not that many; most of the fund positioning would largely remain unaffected
However, we would still take considerable pleasure in investing efforts to help our partners better appreciate and utilise the coming
changes.
The equity market is currently in a state of indecisiveness
At one end, CPI-based inflation is well below the expected trajectory
Domestic consumption, be it marked by car volumes or air travel, is picking up
Credit offtake has now reached double digits; and the growth in the economy is above the 7 per cent levels
On the other hand, weak fiscals, rising crude oil prices and approaching political events do create some concerns for the market.
Oil, in
particular, has the potential to spoil the party for India
Oil price is more a factor of geopolitics than geo-economics
Having said that, shale supply and declining cost of alternative energy sources place a ceiling on how much oil prices can rally
While in the short to medium term, oil may cause issues, in a longer cycle, prices may be more agreeable.
Understandably, volatility in the
debt market may unnerve many investors
The 10-year gilt yields rose by around 64 bps intra month as of April 18
Profit booking, hawkish RBI minutes, rising crude oil prices, strong dollar and rising global bond yields, all came together to cause this
We had earlier communicated that volatility in duration may remain for some time; and to override that investors can allocate through
SIP/STP.
Corporate earnings for March quarter have been a mixed bag till now, although it is still early season
The market is, thus, rangebound; and is moving like a pendulum on forces of liquidity and sentiment
In such a market, outperformance is a function of stock picking
In this phase of the game, a process-driven fund house may do better than those depending only on star power
This brings us to an important topic
Kotak Mutual Fund has signed the United Nations-supported Principles for Responsible Investment (UNPRI)
We are the first AMC to sign this contract and affirm our commitment to the principles of UNPRI
PRI is a leading global network for investors
It tries to integrate environmental, social governance (ESG) practices into investment policies and practices
Globally, AMCs that follow the ESG protocols, in addition to having good risk management and corporate governance practices, deliver
This adherence to UNPRI again underlies our commitment to engage in value creation through responsible investing.
