The Hindu Business Line : MF investors take meltdown in their stride

Chennai, Jan. 23 While retail investors in the derivative segment got butchered during the last few days and were forced to cut their positions, and those in the cash segment too witnessed a lot of trauma, those investing in mutual funds, particularly the long-term investors, seem to be taking the meltdown in their stride.

A few fund managers Business Line spoke to confirmed that their equity funds had been seeing a steady flow of money in the last one week.

Equity schemes of the Quantum Mutual fund, says the CEO and CIO, Mr Devendra Nevgi, have been “seeing much more inflow than normal in the last few days. And this has been aided by the fact that we do not have distributors and deal directly with our clients.”

The biggest advantage of this is that investors don’t need to pay an entry load and “they have a face to talk to during unusual periods such as these. Where a distributor is involved, the investor calls him up and asks what he should do. And quite often, he might get an answer that will benefit the distributor more than the investor! But our investors have come directly to us and put in more money; they’ve seen us handle such falls in the past and are confident that they will get decent returns.”

Using opportunity

At Franklin Templeton, pointed out its CIO-Equity, Mr Sukumar Rajah, “positive inflows have come in the last couple of days though it is not a very huge amount. Investors appear to be taking this as an opportunity to buy, and have not panicked.”

On redemptions, he said there has been “no significant redemption in the last couple of days, though there were some outflows at life-time highs. Overall, we believe Indian investors have taken the recent volatility in their stride and are behaving quite rationally.”

Mr Krishnakumar, Fund Manager at Sundaram BNP Paribas Mutual Fund, who looks after the recently launched Energy fund from the fund house, confirms this. He says the Indian mutual fund investor has evolved and matured over the last couple of years.

“In the last two years, mutual funds have been seeing a lot of retail participation; even in our Energy Opportunities Fund, where we received 5 lakh applications, almost 60-65 per cent was that of retail investors. People are now beginning to understand the benefit of remaining invested over at least a couple of years.”

But what about those who invested in equity funds who’ve got the jitters in this meltdown and are switching to debt funds? On the contrary, points out Quantum’s Mr Nevgi, “there have been people who’ve quickly switched from income to equity funds!”

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