Page 19 - BANKING FINANCE MARCH 2024

MUTUAL FUND

Realty Index Fund will be an open- However, given the market back- The fund house further clarified that
ended scheme replicating / tracking an ground, we see it prudent to limit the the said suspension is not applicable for
Nifty Realty Index (TRI). inflows in our Small Cap Fund at this intra scheme switches between plan(s)
juncture." and option(s) in the same scheme and
The investment objective of the
existing registered SIP / STP or such
scheme will be to provide returns, be-
fore expenses, that commensurate Nippon India Mutual Fund other special product transactions.
with the performance of Nifty Realty suspends subscription in
(TRI), subject to tracking error. Indian mutual fund indus-
four overseas funds
The scheme will be benchmarked try likely to hit Rs 100 lakh
Nippon India Mutual Fund has decided
against Nifty Realty Index (TRI). The crore by 2030: Axis Capital
suspension of subscription in its four
scheme will allocate 95-100% in secu-
schemes. The fund house informed The Indian mutual fund industry is ex-
rities covered by Nifty Realty Index, pected to become Rs 100 lakh crore in
and 0-5% in debt / money market in- about this to its unitholder through a
notice-cum addendum. The changes valuation by 2030, according to a re-
struments including units of mutual
will be effective from February 26. port by Axis Capital.
funds.
The fund house informed that the India's mutual fund industry has doubled
The scheme will be suitable for inves- lumpsum subscription, switch-ins and its AUM in just four years to reach a
tors who are seeking long-term capi- landmark Rs 50 lakh crore in December
fresh registration of SIP/STP or such
tal appreciation and want investment other special products under its over- 2023. Prior to this, the industry took five
in equity and equity related instru- years to double its AUM from Rs 12 lakh
seas funds are being suspended tem-
ments comprised in Nifty Realty Index. crore to Rs 25 lakh crore.
porarily.
The closing in on Rs 100 lakh-crore
Kotak Mutual Fund re- The overseas schemes are: Nippon In- mark underscores how the cumulative
dia US Equity Opportunities Fund,
stricts flows into small-cap Nippon India Japan Equity Fund, power of bite-sized systematic invest-
ment plans (SIPs) from households will
fund Nippon India Taiwan Equity Fund, and lead to a doubling of AUM for India's
Nippon India ETF Hang Seng BeES.
Kotak Mutual Fund will restrict flows mutual fund industry, said the report.
into its small-cap scheme from March The fund house informed that the The AUM has doubled faster with in-
4, joining the likes of Nippon and Tata aforesaid suspension is temporary in creased retail participation and
in limiting investments into this prod- nature and shall be reviewed based on digitisation. Digitisation is enabling this
uct category as elevated share valua- any increase in available headroom exponential growth in retail participa-
tions have made it challenging for fund without breaching overseas invest- tion.
managers to handle continuous flows. ment limits mentioned above or further The report also stated that household
The fund house said in a notice that enhancement of limit by regulators in savings were likely to grow 11% CAGR
fresh subscriptions through lumpsum this regard. as India's GDP reaches ~USD 7 trillion
will be restricted for each investor to The notice-cum-addendum stated that by 2030E. The share of equities in
2 lakh per month. Investments through lumpsum subscription or switch-in ap- household assets has doubled in the
systematic investment plans (SIPs) into plications received post the respective past 10 years (to ~4.7%), outlining sig-
this product also will be capped at applicable cut-off time of the appli- nificant opportunities for AMCs.
25,000 for each investor per month. cable scheme as of February 23, 2024 The report assumes that the prevailing
shall not be accepted and processed.
"Few stocks in the small- and mid-cap ~USD 200 million gross monthly SIP
segment have multiplied, and strong Further applications for creation of flow will grow over 3x by 2030E as In-
momentum is taking them beyond the units of Exchange Traded Funds (ETF) dians deploy more into financial sav-
fair value of businesses," said Kotak in of above-mentioned ETF received di- ings. Approximately 4 million SIP ac-
a letter to investors. "We believe our rectly by the fund house from an inves- counts were created in December
funds are positioned defensively, tor including large investors shall not 2023. January 2024 saw around 4.6
emphasising the quality of businesses. be accepted. million new demat accounts.

BANKING FINANCE | MARCH | 2024 | 17