Latest news with #IL&FS
Mint
26-05-2025
- Business
- Mint
Are sector funds worth the hype? Not for most investors
Rising geopolitical tensions—from Indo-Pak border strains to Trump-era tariff shocks—are prompting investors to rethink where to park their money. As global uncertainty deepens, the spotlight is shifting away from sectors like IT and pharma and turning toward manufacturing and capital-expenditure-led industries, especially in India. Investing in popular sectors or themes with the hope of beating the market can sound like a smart strategy. But in reality, consistently outperforming a diversified portfolio through active sector or thematic bets is as difficult as timing the market—often with results no better than a coin toss. The challenges of picking winners Sectors can appear attractive due to a mix of factors: regulatory changes, new product launches, global trade shifts, interest rate movements, government policies, or temporary commodity and currency disruptions. But understanding how these macroeconomic forces interact—while also evaluating company-specific aspects like leadership and execution—is no easy task, especially for retail investors. As a result, most retail investors tend to make sectoral or thematic investment decisions based on two things: recent market performance of the sector, or media hype fuelled by product launches or industry narratives. Also read: How red tape is costing public sector bank employees crores in NPS savings Boom, bust, repeat The stock market is forward-looking—it often prices in expectations long before actual results show up. This creates a cycle of booms and busts across sectors: IT stocks soared between 1997–1999 (NSE IT Index: +173%, +193%, +493%), only to crash in the following three years (-35%, -36%, -6% from 2000–2002). Pharma had a strong run from 2012 to 2015 (+32%, +26%, +42%, +10%) and then posted four straight years of negative returns (-14%, -7%, -8%, -9%). Infrastructure, real estate, power, and NBFCs saw massive gains before events like the Global Financial Crisis or IL&FS collapse triggered steep declines. Chemical stocks surged in 2020 and 2021 (+46% and +69%) but have since delivered lukewarm single-digit returns. Even if an investor correctly identifies a sector on the rise, they still need to exit before the tide turns. That means getting both the entry and the exit right—a double challenge. Statistically, if the odds of one correct decision are 50%, the chances of nailing both fall to just 25%. The limits of sectoral funds One of the key limitations of sectoral investing is the narrow mandate that many of these funds operate under. Since sectoral funds are bound to invest only within a specific sector—say, IT or pharma—fund managers have little flexibility. They are often forced to include nearly all companies in that sector, regardless of quality. This reduces the manager's ability to generate alpha through stock selection. As a result, the fund's performance is almost entirely driven by how the overall sector performs, not by active fund management. Also read: Are sector rotation funds the answer to risks of sector downturns? A smarter approach for retail investors A more robust strategy, particularly for retail investors, lies in diversified portfolios managed by professionals who can actively adjust sector weights as market conditions evolve. For conservative or first-time investors, it is advisable to start with broad-based investment options such as exchange-traded funds (ETFs), index funds, or diversified equity mutual funds that automatically spread risk across sectors and market caps. Aggressive or more experienced investors can consider a core-satellite strategy—where 75% or more of the equity allocation is invested in diversified funds (like flexi-cap or multi-cap funds), and the remaining 25% is deployed tactically in sectoral or thematic funds based on strong, well-researched convictions. Even here, thematic funds may be safer than pure sectoral funds, as they cut across industries. For instance, a 'capex" fund might include exposure to cement, utilities, auto, power, and real estate—providing broader diversification while still capturing a specific investment theme. Be careful with sector-specific funds. It's hard for individual investors to consistently pick winning sectors better than professional fund managers. You might end up disappointed. Instead, it's often smarter to let professional fund managers make these active choices within a diversified fund. This gives you much better chances of success. Also read: Why balanced advantage funds are back in focus for moderate risk investors Nishant Agarwal, senior managing partner, ASK Private Wealth.
The Hindu
22-05-2025
- Business
- The Hindu
Brokerages downgrade IndusInd after disclosures of fresh fraud
Brokerages including HDFC, Nuvama and IIFL securities advised their clients to reduce or sell IndusInd stocks in their portfolio after the bank revealed further lapses and instances of fraud in its fourth quarter review. The bank reported its worst quarter, posting a net loss of more than ₹2,300 crore as it accounted for all the discrepancies that accumulated over fiscal 2025, according to the bank's financial statements. 'IIB has been guilty of betraying stakeholder trust multiple times over the past few years with repeated episodes of misgovernance. The bank was severely impacted during the IL&FS crises (2018) and the pandemic (2020). Now, having admitted to multiple accounting lapses over the past couple of months, we believe that IIB is faced with a severe loss of credibility, which will need years and a complete overhaul to rebuild,' said HDFC Securities in its analyst report further adding that IndusInd was among the worst in terms of compliance and it was 'operating akin to an NBFC,' Despite this, the bank's stock closed 1.82% up at 785.10 on the BSE on Thursday, as the bank said that it was taking action against the employees involved in the fraud and in expectation of a new leadership. Further, the Chairperson and promoter of IndusInd International Holdings of Ashok P Hinduja in a statement expressed his 'unequivocal trust in the Chairman & Board of Directors of the Bank for their appropriate, swift actions in order to address discrepancies and attendant areas of concern.' He further added that the regulator was dealing with this issue in an orderly manner. In a separate event in New Delhi, Securities and Exchange Board of India (SEBI) Chief Tuhin Kanta Pandey said that 'if there are any egregious violations by anyone in its capacity, SEBI is looking into them.'
Economic Times
09-05-2025
- Business
- Economic Times
IL&FS Mutual Fund pays Rs 262 cr to debt infra investors; Rs 1,900 cr total payout in last 6 yrs
Live Events IL&FS Mutual Fund has paid Rs 262 crore to investors in its infrastructure debt fund, taking the total payout to Rs 1,900 crore over the past six years, the company said. The debt scheme -- IL&FS Infrastructure Debt Fund Series 3B -- was redeemed on May 7, making it a timely scheme redeemed Rs 262 crore, against the original invested capital of Rs 153 crore, delivering a return of around 8 per cent per annum to the investors since inception, according to a statement issued by IL&FS this, the total amount of Rs 1,900 crore has been redeemed and returned to the investors over the past six years across different infrastructure funds under the IL&FS Mutual Fund successfully made four on-time redemptions so far, including Rs 405 crore in Scheme 1A in April 2019; Rs 427 crores in Scheme 1B in April 2021; Rs 185 crore in Scheme 3A in January 2023; Rs 611 crore in Scheme 1C in April 2024, and now the fifth redemption payment of Rs 262 crore was completed in Scheme 3B in May Infrastructure Debt Fund is managed by IL&FS Infra Asset Management Ltd. The target investors for the fund are banks, pension funds, insurance companies, foreign investors, sovereign wealth funds and bilateral or multilateral October 2018, the Government of India, through the Ministry of Corporate Affairs, took management control of IL&FS Group and appointed a new board in a move to control defaults and restore confidence and financial stability in capital markets.
Time of India
09-05-2025
- Business
- Time of India
IL&FS Mutual Fund pays Rs 262 cr to debt infra investors; Rs 1,900 cr total payout in last 6 yrs
Live Events IL&FS Mutual Fund has paid Rs 262 crore to investors in its infrastructure debt fund, taking the total payout to Rs 1,900 crore over the past six years, the company said. The debt scheme -- IL&FS Infrastructure Debt Fund Series 3B -- was redeemed on May 7, making it a timely scheme redeemed Rs 262 crore, against the original invested capital of Rs 153 crore, delivering a return of around 8 per cent per annum to the investors since inception, according to a statement issued by IL&FS this, the total amount of Rs 1,900 crore has been redeemed and returned to the investors over the past six years across different infrastructure funds under the IL&FS Mutual Fund successfully made four on-time redemptions so far, including Rs 405 crore in Scheme 1A in April 2019; Rs 427 crores in Scheme 1B in April 2021; Rs 185 crore in Scheme 3A in January 2023; Rs 611 crore in Scheme 1C in April 2024, and now the fifth redemption payment of Rs 262 crore was completed in Scheme 3B in May Infrastructure Debt Fund is managed by IL&FS Infra Asset Management Ltd. The target investors for the fund are banks, pension funds, insurance companies, foreign investors, sovereign wealth funds and bilateral or multilateral October 2018, the Government of India, through the Ministry of Corporate Affairs, took management control of IL&FS Group and appointed a new board in a move to control defaults and restore confidence and financial stability in capital markets.
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Business Standard
08-05-2025
- Business
- Business Standard
IL&FS MF pays ₹262 cr to infra investors; total payout hits ₹1.9K cr
IL&FS Mutual Fund has paid Rs 262 crore to investors in its infrastructure debt fund, taking the total payout to Rs 1,900 crore over the past six years, the company said. The debt scheme -- IL&FS Infrastructure Debt Fund Series 3B -- was redeemed on May 7, making it a timely redemption. The scheme redeemed Rs 262 crore, against the original invested capital of Rs 153 crore, delivering a return of around 8 per cent per annum to the investors since inception, according to a statement issued by IL&FS Group. With this, the total amount of Rs 1,900 crore has been redeemed and returned to the investors over the past six years across different infrastructure funds under the portfolio. Previously, IL&FS Mutual Fund successfully made four on-time redemptions so far, including Rs 405 crore in Scheme 1A in April 2019; Rs 427 crores in Scheme 1B in April 2021; Rs 185 crore in Scheme 3A in January 2023; Rs 611 crore in Scheme 1C in April 2024, and now the fifth redemption payment of Rs 262 crore was completed in Scheme 3B in May 2025. IL&FS Infrastructure Debt Fund is managed by IL&FS Infra Asset Management Ltd. The target investors for the fund are banks, pension funds, insurance companies, foreign investors, sovereign wealth funds and bilateral or multilateral associations. In October 2018, the Government of India, through the Ministry of Corporate Affairs, took management control of IL&FS Group and appointed a new board in a move to control defaults and restore confidence and financial stability in capital markets.
