Mutual Funds Market in 2020: In the mutual fund market, the returns of smallcap fund categories were higher than LORGAP.
Year-end 2020 Mutual Fund: The current year has been very volatile for the capital market. In the first 2 months of the year, where the mutual fund market was getting a lot of returns, due to the lockdown due to corona virus, most of the funds of 1 to 3 years went negative till mid of the year. However, the rally that started in the market from July onwards went to peak by November. When the equity market gained momentum, the returns of every category went into double-digit, except one or two in the equity segment of debt funds. Smallcap Fund outperformed this year as compared to Lorgecap. At the same time, the pharma and technology funds filled the pockets of investors.
How much return in which category
Equity Smallcap Fund: 30%
Equity Midcap Fund: 25%
Equity largecap fund: 14 percent
Equity multicap fund: 14 percent
Equity large and midcap fund: 16 percent
Equity Value Oriented Fund: 16%
Equity ELSS: 15%
In sectoral kategiri
Equity Pharma: 65 percent
Equity Technology: 50%
Equity Banking: -6%
Sectoral Infra: 9%
Sectoral thematic: 19 percent
Sectoral Energy: 22%
Sectoral PSU: -2%
Sectoral Consumption: 19%
Sectoral International: 20 percent
Highest Returning Funds
DSP Healthcare Fund: 81 percent
PGIM India Global Equity Fund: 76%
Quant Smallcap Fund: 76%
Mirae Asset Healthcare Fund: 75%
ICICI Pru Pharma Healthcare Fund: 72 percent
BOI AXA Smallcap Fund: 57%
Franklin Technology Fund: 54 percent
ABSL Digital India Fund: 53%
PGIM India Midcap Opp: 52%
Quant Consumption Fund: 48%
Changes in the rules of mutual funds
Risk identification: In order to enable investors to identify the risks of mutual funds properly, market regulator SEBI has introduced a “very high risk” category to warn investors. All mutual funds will now have to show 6 signals in the risk-o-meter instead of 5. This change will come into effect from 1 January 2021.
Rules for investing in multicap funds: SEBI has changed the rules for asset allocation for multicap mutual funds. According to the new rules, 75 per cent of the funds will now be required to invest in equity, which is currently a minimum of 65 per cent. Funds will be required to invest 25-25 per cent in largecap, midcap and smallcap. Earlier, fund managers used to allocate according to their choice.
Portfolio Revealed: Debt mutual funds have to disclose their portfolio every 15 days instead of 30 days. This step will also help in understanding any risk.
Liquid Fund Changes: SEBI has made it mandatory for liquid funds to hold at least 20 per cent of their portfolio in liquid assets such as cash, tea bills, government securities and repo rates on government securities at all times.
Investment in unlisted NCDs: SEBI allowed mutual funds to invest in non-convertible debentures (NCDs), which are up to 10% of the debt portfolio of a scheme. Its objective is to bring transparency in investment in debt and money market instruments by mutual funds.
Source: www.financialexpress.com