Page 20 - Banking Finance June 2020

MUTUAL FUND

endeavour to accelerate monetisation that SmartSwitch will be India's first funds gave fund managers a healthy
post the successful completion of the revolutionary mutual fund portfolio stream of capital to keep buying qual-
e-voting exercise and the unitholder evaluation and recommendation tool. ity companies, experts said.
meets. Franklin Templeton shut six "SmartSwitch helps investors get a This comes in the backdrop of the
debt mutual fund schemes on April 23, quality score for their portfolio, get coronavirus pandemic related disrup-
citing redemption pressure and lack of
specific recommendations and then will tions, a sharp slowdown in economic
liquidity in the bond market.
allow them to switch poor-quality funds activity across the globe and a steep
With regard to concerns over decline to better-recommended funds," said sell-off in equities in March 2020.
in net asset value (NAV) of some of the Jimeet Modi, CEO, Samco Group. Overall, mutual funds (MFs) have made
funds, Sapre said this is the result of a "RankMF takes into consideration a a net investment of Rs. 39,478 crore
maturity date reset for the securities variety of factors into consideration in stocks during January-June 2020,
of Edelweiss Rural & Corporate Ser- and over 20 million data points such as much higher than the Rs. 8,735 crore
vices Limited (ERCSL). "The impact on
expense ratios, standard deviation, invested in the first six months of 2019,
the NAV is due to valuation provided
beta, market valuations, and multiples, latest data available with the Securi-
by the valuation agencies due to reset
portfolio holdings and diversification/ ties and Exchange Board of India (Sebi)
of maturity date to the next rate re-
concentration of portfolio, the cash showed. Of the total, more than Rs.
set date (June 30, 2022)," he said. ratio of a fund, size of the fund, the 30,000 crore was invested in March
predicted yields and we can go on and alone, when equity markets witnessed
RankMF's new mutual on, however one of the most impor- a sharp sell-off.

fund tool will analyse tant factors is the actual portfolio qual- "The volatility and correction in the
ity of holdings since that is what is go-
portfolio for investors ing to deliver investor returns," the equity markets has provided good in-
RankMF, part of the discount broking company said. vestment opportunity for investors,"
firm Samco Group, has launched "SmartSwitch is a revolutionary solu- said Himanshu Srivastava, Director-
SmartSwitch - a new mutual fund port- Manager Research at Morningstar In-
tion for these investors. They can sim- dia.
folio upgradation tool. SmartSwitch
ply upload their eCAS, check their port-
analyses mutual fund portfolio of inves- folio score and switch their existing He further said despite challenges,
tors and recommends proper realloca- investments from poor quality or non- flows into equity-oriented mutual funds
tion. With SmartSwitch, the investors performing funds to a recommended have been good this year, displaying a
will be able to evaluate their current quality mutual fund portfolio," more mature investor behaviour
mutual fund portfolio, check their port- wherein they are looking at correc-
Omkeshwar Singh, Head - Rank MF,
folio score and switch poor-performing Samco Group said. tions as an opportunity rather than
funds into new recommended funds. threat.
This innovative tool will help investors Mutual funds investment Consequently, good flows into the
by scoring existing mutual fund portfo- in stock markets increased funds and attractive valuations have
lio on various parameters like 1) qual- enabled mutual fund to park more in-
ity of existing mutual funds, 2) cat- by 4 times this year vestments into the market and capit-
egory of mutual funds, 3) over or un- Mutual funds net invested nearly Rs. alise on this investment opportunity, he
der exposure to specific fund or cat- 39,500 crore in the stock markets in added.
egory and 4) over or under diversifica- the first six months of 2020, more Bajaj Capital said the over four-times
tion. than four-times the amount infused in higher investment during the six
the year-ago period, as volatility and
SmartSwitch uses RankMF's propri- months ended June 30, 2020 could be
etary research and rating engine to correction in the broader markets pro- explained by the rising popularity of
vided a good investment opportunity
suggest switching of poor-performing asset allocation funds and such funds
schemes with high quality recom- for investors. using the sharp fall of March to in-
mended schemes, the company said in Further, consistent SIP (systematic in- crease equity exposure at lower levels
a statement. The company claimed vestment plan) inflows into equity as valuations turned attractive. T

20 | 2020 | JUNE | BANKING FINANCE