Page 17 - Banking Finance September 2022

MUTUAL FUND

Mutual Fund

ICICI Prudential Mutual owned by non-promoters, the PSU Interest rate will be the major factor to
space provides better Margin of Safety. dictate flow in debt mutual funds in com-
Fund launches PSU Equity
Two, valuations in the PSU space have ing quarters. Once rates start stabilizing,
Fund been attractive for a while now again inflows can be expected, Ankit Yadav,
indicating that companies have better director of Market Maestroo, said.
ICICI Prudential Mutual Fund has
Margin of Safety. Three, PSUs tend to
launched ICICI Prudential PSU Equity The latest outflow has pulled down the
offer better dividend yield than
Fund, an open-ended equity scheme asset managed by fund managers for
broader markets. Average dividend
with an objective to provide long-term debt fixed-income funds by 5% to 12.35
yield of S&P BSE PSU Index (last 17
capital appreciation by investing pre- lakh crore at June-end from close to 13
years) is 2.6 whereas that of S&P BSE
dominantly in equity and equity related lakh crore at the end of March, data
instruments of PSU companies. The Sensex is 1.3. In a volatile environ- available with the Association of Mu-
ment, companies providing high divi-
scheme may invest in sectors/stocks tual Funds in India showed.
dend yield tend to have higher demand
that form a part of S&P BSE PSU Index.
resulting in capital appreciation.
The scheme may also invest in oppor-
HDFC Mutual Fund laun-
tunities across market cap - that is.
large, mid or small cap. Investors pull out Rs ches HDFC Silver ETF
"PSU companies form an important con- 70,000 crore from debt HDFC Asset Management Company
stituent of Capital Markets and are has launched HDFC Silver ETF, an open-
mutual funds in June
present across different sectors present- ended Exchange Traded Fund (ETF)
ing wide investment opportunities. Also, quarter replicating/tracking performance of
PSUs appear to be attractively placed on Investors continued to withdraw from Silver .
valuation basis and offer better margin mutual funds focused on investing in The investment objective is to gener-
of safety. In a volatile environment, com- fixed-income securities for third con- ate returns that are in line with the
panies providing high dividend yield tend secutive quarter and pulled out over performance of physical silver in do-
to have higher demand resulting in capi- 70,000 crore in April-June due to high mestic prices, subject to tracking error.
tal appreciation," Chintan Haria, Head - inflation and an increasing rate cycle. Investing in physical silver and storing
Product Development and Strategy, ICICI
"In the next (September) quarter, it is it in a safe manner could be difficult for
Prudential AMC.
safe to assume that monetary condi- an individual, hence HDFC's Silver ETF
According to the fund house, many tions will be tighter in terms of lower NFO gives an opportunity to the inves-
factors make the PSU space attractive: amount system liquidity and higher tors to digitally invest and own silver
One, government ownership in PSU regulatory rates, both of which should which is easily tradable during market
companies is substantial compared to see further reduction in mutual fund hours, replicates/tracks the perfor-
non-promoters (FPIs, DIIs & Retail). As debt corpuses," Sandeep Bagla, CEO mance of silver, and diversifies one's
these companies are highly under Trust Mutual Fund, said. portfolio at a low cost.

BANKING FINANCE | SEPTEMBER | 2022 | 17