Stocks

Key market indices to rise 10% this year: Birla MF

Our Bureau Mumbai | Updated on January 11, 2018 Published on January 09, 2018

Aditya Birla Sun Life Mutual Fund expects the key benchmark indices — Sensex and Nifty — to register a moderate growth of 10 per cent this year. In 2017, the BSE Sensex gained 29.58 per cent while the NSE Nifty rose 30.28 per cent.

The effect of reforms would continue to affect corporates this year and a nimble view on different sectors is required, said the fourth-largest fund house with AUM of ₹2.41 lakh crore.

The mutual fund industry witnessed one of its strongest growth in AUM by adding over ₹5.4 lakh crore to take the overall total to ₹22 lakh crore in 2017 with renewed participation from retail investors and investor awareness initiatives. Interestingly, the 32 per cent growth logged by the industry last year was the fifth consecutive yearly rise in AUM, after a drop in the asset base for two preceding years.

Good show on cards

A Balasubramanian, CEO, Aditya Birla Sun Life AMC, said despite the twin disruptions of demonetisation and implementation of GST, corporate earnings would pick up pace and grow at 19 per cent next fiscal against 10 per cent to be logged in FY18.

“We expect the benchmark indices Sensex and Nifty to grow about 10 per cent this year while investors can expect return of 12-15 per cent from the market over three-five years,” he said.

On the impact of the new SEBI norm on benchmarking MF returns, he said it will not alter investor perception in MF investment in any way and would not impact fresh fund flows.

“If you compare mutual funds returns with TRI over the last six months it may be lagging behind but when compared over the longer period it is not difficult to beat the index,” said Balasubramanian.

Mahesh Patil, co-Chief Investment Officer (Equity), Aditya Birla Sun Life MF, said the forthcoming Budget should be focusing on measures to kick-start the economy and provide some incentives to drive consumption.

The execution of further reforms by the government and recapitalisation of banks would resolve the twin balance sheet problem to a large extent, while GST would stabilise and improve indirect tax collections, he added.

Published on January 09, 2018
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