Page 15 - Banking Finance December 2022

MUTUAL FUND

Mutual Fund

News

Indian mutual funds re- small cap stocks. The scheme will in- set management company would be
vest a minimum of 65% of net assets required to transfer to the unitholders
turn to govt bonds as in-
in equity and equity related instru- the dividend payments and the re-
flation, rates spikes ments of small cap companies. It may demption or repurchase proceeds
take exposure in equity derivative in- within a period specified by Sebi, the
Indian mutual funds are flocking back
struments to the extent of 50% of the regulator said in a notification made
to government bonds as inflation is
equity permitted component. The fund public.
expected to have peaked, leaving lim-
will be managed by Abhinav
ited room for further rate hikes that, In case of failure to transfer the pro-
Khandelwal and Manish Lodha.
in turn, is leading to sharp decline in ceeds within the specified period, the
yields, fund managers said. According to the fund house, the AMC would be liable to pay interest to
scheme is suitable for investors seeking the unitholders for the period of such
"Market is expecting inflation to have
long term capital appreciation and In- delay.
peaked and slow into 2023, while
vestment predominantly in equity and
growth headwinds have picked up into It further said that physical despatch
equity related securities of small cap
2023, especially in the western world," of redemption or repurchase proceeds
companies. Small cap mutual funds
said Vikram Chopra, a fund manager or dividend payments would be carried
have potential to create wealth and
with DSP Investment Managers. out only in exceptional circumstances
generate alpha over the long term, as
This trend could persist as mutual funds and AMCs would be required to main-
they provide exposure to companies
tain records along with reasons for all
had limited exposure to government
which are potential market leaders in
bonds over the last few months after such physical dispatches.
the industries they operate in and are
the Reserve Bank of India (RBI) ag- To give this effect, the Securities and
likely to become future midcaps as
gressively raised interest rates to tackle Exchange Board of India (Sebi) has
they scale up.
steep inflation. The central bank has amended mutual funds rules and the
raised rates by an aggregate 190 ba- new norms would come into force
Sebi notifies rules on divi-
sis points since May. from January 15.
dend, redemption pro-
Mahindra Manulife Mu- ICICI Prudential MF
ceeds
tual Fund launches small launches Nifty Financial
Sebi has notified new rules for asset
cap fund management companies (AMCs) per- Services Ex - Bank ETF
taining to transfer of dividend and re-
Mahindra Manulife Mutual Fund has ICICI Prudential Mutual Fund has
demption proceeds to mutual fund
launched the Mahindra Manulife Small launched ICICI Prudential Nifty Finan-
unitholders.
Cap Fund, an open-ended equity cial Services Ex-Bank ETF, an open-
scheme predominantly investing in Under this, every mutual fund and as- ended exchange traded fund tracking
BANKING FINANCE | DECEMBER | 2022 | 15