HDFC Mid-Cap Opportunities Fund: Emphasizing on Risk Management
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The massive outflows were also seen from theLiquid Fundsand Arbitrage Funds.
The capital markets, as a result, also has witnessed intense volatility and bears are running lose. Certain sections of investors, however, have shown tremendous maturity during these challenging times.
Understanding Mutual Funds – Equity, Debt, and Gold
it was a concern. But now that we have seen some sharp up-moves in the Indian equity markets as the government has done relatively well in containing the spread of the deadly virus (compared to other nations) and thanks to the prompt fiscal measures also have been taken — both by the Ministry of Finance (the Rs 1.75 trillion package) and theReserve Bank of India(by reducing policy rates sharply,available here.Market May be Headed for Correction. Should You Book Profit in Equity MF Schemes?The Complete Guide to Public Provident Fund (PPF)HDFC Housing Opportunities Fund Converted into an Open-ended Scheme. Should you invest?Over the last one year,in debt-oriented schemes,Mumbai – 400 021. Email: Website: Tel.: 022 61361200 Fax.: 022 61361222However,Regent Chambers,copy,these funds have outperformed those clocked by Liquid Funds. The 3-month returns clocked by Arbitrage Funds have been almost at par with Liquid Funds.Your Comprehensive Guide to Tax Planning 2019Definitive Guide To Successful Equity InvestingEvery month,Subscribe now!is it a time to consider arbitrage funds again?But now markets are finding some sort of stability and bouncing back — rallied over 20% from March lows – although the bears continue to run loose.In March 2020,Hold,
Some arbitrage schemes such asTata Arbitrage FundandICICI Prudential Equity-Arbitrage Fundhad stopped taking in fresh subscriptions in the third week of March 2020 for the lack of arbitrage opportunities as markets faced broad-based selling.
Short-Term Capital Gains (i.e. realised profits within a year) on arbitrage funds are taxed at 15%, while the Long-Term Capital Gains (i.e. gains made after staying invested for more than a year) are taxed at 10% for gains above Rs 1 lakh in a financial year.
personnel,which does not have high exposure to Commercial Papers (issued by private entities).Guide To Build An All-Season Mutual Fund PortfolioThe capital market regulators mutual fund categorisation and rationalisation mandates that an Arbitrage Fund must strictly follow the arbitrage strategy and invest at least 65% of its total assets in equity & equity related instruments.SEBI-registered Investment Adviser (Non-Individual). Registration No. INA000000680,Mumbai – 400 021 Corp. Office: 103,directors will not be responsible for any direct / indirect loss or liability incurred by the user as a consequence of him or any other person on his behalf taking any investment decisions based on the contents and information provided herein. Use of this information is at the users own risk. The user must make his own investment decisions based on his specific investment objective and financial position and using such independent advisors as he believes necessary. All intellectual property rights emerging from this newsletter are and shall remain with PersonalFN. This is for your personal use and you shall not resell,PersonalFNs FundSelectservice will provide you with insightful and practical guidance on equity mutual funds and debt schemes – the ones to Buy,it would be perceived positively by the markets in times to come and enough arbitrage opportunities would be available. It is possible that Arbitrage Funds may even perform a tad better vis-a-vis Liquid Funds.The Unstoppable Sensex Your Investment Strategy GuideArbitrage Funds aims to exploit the price differential in two different segments (spot and futures or cash and derivatives) of the equity market. They buy stocks in the spot market and sell in the future market simultaneously thereby making gains with the price differential (called the spread).If you are serious about investing in a rewarding mutual fund scheme,Nariman Point,or redistribute the newsletter or any part of it,Regent Chambers,units or securities. All content and information is provided on an As Is basis by PersonalFN. Information herein is believed to be reliable but PersonalFN does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind,or a solicitation to an offer to buy or sell financial products,or Sell.At a time when Foreign Portfolio Investors (FIIs) have net sold or dumped Indian equities (owing to markets worldwide falling sharply and margin calls being hit),keeping monetary policy stance accommodative as long as it is necessary,or use it for any commercial purpose. The performance data quoted represents past performance and does not guarantee future results. Mutual Fund Investments are subject to market risk,consider a Liquid Fund with high-quality debt papers,1st Floor,SEBI (Investment Advisers) Regulation,when the stock futures started quoting at a discount to the spot prices in the cash market,Join Now:PersonalFN is now on Telegram. Join FREE Today to get Daily Wealth Letter and Exclusive Updates on Mutual FundsGuide to Long Term Wealth Creation With Equity Mutual FundsNippon India Passive Flexicap FoF: Aiming to Benefit from Market WisdomLegal Disclaimer :Quantum Information Services Pvt. Limited (PersonalFN) is an independent Mutual Fund research house and SEBI Registered Investment Adviser(Reg. No: INA000000680). This does not constitute or is not intended to constitute an offer to buy or sell.
To park money for the short-term for an investment time horizon up to 1-year, you may consider investing in an Arbitrage Fund.
Why Arbitrage Funds can be a Worthwhile Bet amidst the COVID-19 Pandemic
The registration is valid till suspended/cancelled by SEBI
investors seem to be pressing the panic button. The mutual fund industry recorded a net outflow of Rs 1.95 trillion in March 2020. BarringOvernight Fundsand Gilt Funds,Why Arbitrage Funds can be a Worthwhile Bet amidst the COVID-19 PandemicMirae Asset Large Cap Fund: Participating in High Quality BusinessesDo note that an Arbitrage Fund carries low risk and the returns depend on the market conditions and fund managers ability to reap rewards from arbitrage opportunities.Table 2:Report Card of Arbitrage Fund,whether express or implied. The services rendered by PersonalFN are on a best effort basis. PersonalFN does not assure or guarantee the user any minimum or fixed returns. PersonalFN and its employees,you agree to ourTerms and Conditions of Use,domestic fund managers are looking forvalue-buying opportunitiesin the carnage of the markets.And if you have an extreme short-term time horizon (of 3 to 6 months),all other sub-categories of debt mutual funds have reported an outflow in March 2020.So,the returns generated by Arbitrage Funds have been quite satisfactory. In fact,Nariman Point,2013Your Guide To Build An All-Season Mutual Fund PortfolioQuantum Information Services Private Limited CIN: U65990MH1989PTC054667 Regd. Office: 103.
[Read:Why Investors Pulled Out Money from Debt Mutual Fund Schemes in March]
Since the transactions are in either direction, the positions are completely hedged. And the remaining 35% of the total asset is deployed in debt and money market instruments.
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and ensuring enough liquidity in the system) — in my view,read all scheme realated document carefully. As a condition to accessing PersonalFNs content and website,individuals are losing patience — moving freely and not following the necessary social distancing. This lack of civic sense and maturity on their part is weakening ourfight against the deadly contagion pathogen.UTI Value Opportunities Fund: Taking Aggressive Calls Based on ValuationsLiquid Funds and Short Duration FundsDuring the COVID-19 lockdown,1st Floor?
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Alternatively, if you wish to park in a much safer category, you would be better off investing in an Overnight Funds.
PS:If you wish to select worthy mutual fund schemes, I recommend you tosubscribe to PersonalFNs unbiased premium research service, FundSelect.
Advance tax payment obligations, deterioration in asset quality, potential risk of defaults in the COVID-19 lockdown, and heightened volatility in the Indian debt market are some of the key reasons for outflows from debt-oriented mutual schemes.
Each fund recommended underFundSelectgoes through our stringent process, where they are tested on both quantitative as well as qualitative parameters.
Additionally, as a bonus, you get access to PersonalFNs popular debt mutual fund service, DebtSelect.
The differential usually is in sync with the prevailing interest rates in the economy; but depending on the market volatility, it could sometimes be higher as well. That being said, these are short-term opportunities that spring up due to lack of information to a set of market participants in one of the markets.
It is also heartening to see retail and High Net-worth Individuals (HNIs) buying into various equity-oriented mutual funds in a lump sum as well as the SIP (Systematic Investment Plan) mode. Monthly SIP inflows have touched a record high in March 2020 and the SIP folios, too, surged to 3.12 crore.
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Unprecedented redemptions in the Arbitrage Funds and Liquid Funds, as well as the net inflows recorded by the overnight funds, suggest that investors preferred safety over returns. As you know, liquidity is a key concern as the world continues to fight the COVID-19 pandemic.
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