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Business Standard
06-08-2025
- Business
- Business Standard
RBI allows treasury bills investment via SIP in Retail Direct scheme
The Reserve Bank of India (RBI) has introduced systematic investment plans (SIPs) facility for investment in treasury bills in the central bank's Retail Direct scheme. 'To enable investors to systematically plan their investments, an auto-bidding facility for treasury bills (T-bills), covering both investment and reinvestment options, has been enabled in Retail Direct. The new functionality helps investors to mandate automatic placement of bids in primary auctions of T-bills,' RBI said. The Retail Direct portal was launched in November 2021 to facilitate retail investors to open their gilt accounts with the RBI under the Retail Direct scheme. It allows retail investors to buy government securities (G-Secs) in primary auctions as well as buy and sell G-Secs in the secondary market. According to RBI's recent data, the retail investors continue to invest more in treasury bills as compared to instruments like state and central government securities, and sovereign gold bonds through the scheme. 'We are expanding the functionality in RBI Retail Direct platform to enable retail investors to invest in treasury bills through systematic investment plans,' RBI governor Sanjay Malhotra said. As of August 4, 68 per cent of the total primary market subscriptions were channelled through T-bills, whereas, only 10.4 per cent subscriptions were through central government dated securities. Subscriptions through state government securities, and sovereign gold bonds were 6.2 per cent, and 4.3 per cent respectively. The subscriptions through floating rate saving bonds stood at 11 per cent. Since the launch of the scheme, RBI has introduced several new features, including the launch of a mobile app in May 2024. According to experts, the new functionality is expected to support the market and indicates a proactive approach by RBI. Vishal Dhawan, co-founder, Plan Ahead Wealth Advisors, said, 'This is a way to put money through the RBI direct platform into treasury bills for saving money towards either short-term or long-term investor needs. It has been one of the missing links as far as the debt side is concerned because most of the retail participation in debt has traditionally come through institutions like insurance companies, mutual funds, etc.' Another treasury expert said, 'There is need for more clarity as the platform will have to introduce additional features to introduce SIP. Also, it is not likely to see a major difference in retail participation in the segment, unless there is a huge gap between deposit rates offered and the T-bill rates.'
Time of India
04-08-2025
- Business
- Time of India
Nifty slips into consolidation: What is the right strategy for mutual fund investors now?
Live Events With the benchmark index - Nifty50 entering a consolidation phase after witnessing a rally in the first half of the year and making mutual fund investors wondering whether to go for SIP , lumpsum or wait, market experts recommends that this is a good time to continue or even increase the SIPs, especially if your income has grown as SIPs work best during volatile or sideways markets, helping you accumulate more units at lower NAVs.'If you have surplus funds, avoid deploying them all at once in equities, especially amid ongoing global uncertainties. A better approach is to stagger lump-sum investments using Systematic Transfer Plans (STPs) from a liquid or low-duration debt fund into equity funds over 6-12 months,' Vishal Dhawan, CEO of Plan Ahead Wealth Advisors, a wealth management firm in Mumbai, shared with expert in addition to this mentioned that SIPs are the perfect route to take market exposure without worrying about the risk of market timing.'SIPs are the perfect route to take market exposure without worrying about the risk of market timing. Investors should continue with their SIPs as trying to time the market more often than not results in poor portfolio outcomes,' Kaustubh Belapurkar, Director - Manager Research, Morningstar Investment Research India told the first half of the current calendar year, Nifty50 went up by 7.47%. In July 2025, the index corrected 3% and closed at a level of 24,768 on July 31 against a close of 25,541 on July 1. On July 28, the benchmark closed at a level of 24,680As Nifty went down by 3% in July, Dhawan recommends that for investors using the SIP route, such market dips are actually advantageous, as they allow accumulation of more units at lower NAVs through rupee cost averaging and minor corrections like this should not be a reason to pause or alter SIPs as equity mutual fund investments are designed for long-term wealth this consolidation phase, portfolio allocation should always be guided by the investor's risk appetite and financial goals is what Dhawan believes and also recommends that for an investor with a moderate risk profile, a well-balanced allocation could be a combination of equity mutual funds (large-cap, flexi-cap, and international funds), hybrid funds, including categories like balanced advantage, some debt funds for capital preservation and stability, and a small exposure in commodities such as gold and silver, which offer a hedge during a market experts always recommend that investors should always invest according to their risk appetite, investment horizon, and financial goals as no two investors have the same goals, investment horizon, and risk tolerance a similar opinion, Belapurkar recommends that investors need to continue following a disciplined asset allocation approach and each investor's asset allocation is unique, which is driven by their risk return objectives and investment time horizon so if their current portfolio allocation is misaligned from their strategic asset allocation, it would be a good time to realign their are various options available among equity and equity oriented funds which provide stability to investors during the volatile market. Mostly, large-cap mutual funds and flexi-cap funds are considered more suitable by market experts during this phase whereas on the hybrid side, balanced advantage, multi asset allocation, and dynamic asset allocation funds are considered to Belapurkar, investors should continue to invest in a judicious mix of funds investing across the capitalization curve, with a core holding in large and flexi caps funds and he has also observed that many investors are significantly overallocated to small and mid cap funds due to the rally in these stocks since covid, therefore it would be prudent to prune exposure in these segments to strategic asset allocation levels depending on their individual risk tolerance and investment time the other hand, Dhawan lists hybrid fund categories as well where investors can consider investing during this volatile or consolidation period. He shares categories where investors should make investments and where they should reduce during periods of market consolidation , investors can consider hybrid fund categories such as balanced advantage funds or multi-asset funds, which dynamically manage equity, debt, and sometimes commodities like gold for lumpsums, Dhawan next he lists banking and financial services funds as a suitable option for investment as the sector currently appears attractive and has underperformed in the recent rally due to concerns around credit-deposit growth divergence, softening net interest margins, and asset quality pressures.'These headwinds may ease soon, with the RBI's supportive liquidity stance and strong macroeconomic conditions offering a positive outlook. With banking sector valuations below historical averages, it may be a good time for investors to consider banking and financial services funds for a balance of stability and growth,' Dhawan cautioning investors on sectoral, mid cap, and small cap funds, Dhawan said that sectoral funds carry concentrated risks and are best suited only for seasoned investors and we do not recommend allocating more than 5-10% of one's total mutual fund portfolio to any single sectoral fund and lastly investors should exercise caution with small-cap and mid-cap mutual funds as these segments have witnessed a sharp rally over the past few quarters, leading many portfolios to become overweight relative to their original asset allocation and reducing exposure in these two categories is July, among the diversified equity categories, flexi cap funds lost 1.94% and the multi cap funds lost 1.76%.Going forward, the expert from Plan Ahead Wealth Advisors believes that valuations across Indian equities remain elevated compared to historical averages, especially in the midcap and smallcap segments, which have seen sharp rallies in recent quarters and given this backdrop, large-cap stocks and defensive sectors may offer more favourable risk-adjusted returns, particularly if market volatility risks, including geopolitical tensions and the trajectory of US Federal Reserve policy, alongside domestic events such as state elections, may lead to intermittent corrections—potentially creating entry points for long-term investors and with inflation showing signs of stability, short-to-medium duration debt funds are better positioned to benefit from the current rate cycle, offering a balanced combination of yield and lower interest rate should always consider risk appetite, investment horizon, and goals before making any investment decisions.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Time of India
28-07-2025
- Business
- Time of India
Smallcap mutual funds dominate return charts in 5 & 10 years. What's driving the surge?
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads If you are looking for recommendations, see: Smallcap mutual funds have topped the return charts in both five and ten years across all equity fund categories, including sectoral and thematic schemes. According to market experts, while smallcap funds and indices have delivered similar returns over the past five years, the category has significantly outperformed the index over a ten-year period and their relatively smaller size offers higher growth potential, making them appealing to investors willing to take on higher risk for potentially higher rewards.'Over the last 5 years, both the Nifty Smallcap 100 Index and smallcap mutual funds have delivered approximately 33% returns. Whilst over 10 years, the smallcap mutual fund category has outperformed, delivering around 18% CAGR compared to the index's 14% CAGR,' Vishal Dhawan , CEO of Plan Ahead Wealth Advisors, a wealth management firm in Mumbai, shared with caps are often companies with the ability to grow earnings at a faster clip than more mature large caps and their relatively small size allows for higher growth potential, which can translate into significant returns for investors who are willing to embrace the risk moreover many small caps are closely tied to India's domestic consumption and manufacturing trends, which benefit from structural tailwinds, Dhawan mentioned as the reason for this surge in small caps tend to be more attractively valued than large caps during market corrections, they can offer better risk-reward for patient investors. However, their higher business and liquidity risks make them more suitable for those with a higher risk appetite and a long investment horizon, he on July 23, 2025 small cap funds have offered an average return of 32.48% in the last five years and an average return of 17.12% in the last 10 years. Around 21 small cap funds have completed five years of existence in the market out of which Quant Small Cap Fund offered the highest return of 41.36% and Aditya Birla Sun Life Small Cap Fund gave the lowest of 27.67% 13 small cap funds have completed 10 years of existence in the market out of which Nippon India Small Cap Fund offered the highest return of 21.06% and Aditya Birla SL Small Cap Fund gave the lowest return of around 13.33%,Considering the performance in the long term, Dhawan recommends trimming exposure in these funds and investors should revert to their target asset mix and lastly avoiding lumpsum investment and doing SIP/STP with a 10 year horizon would be a prudent to the expert, while smallcap mutual funds have delivered strong long-term returns, current valuations are trading at a premium to historical averages which suggests that the risk-reward is less favourable at this the sharp rally in recent quarters, many investors may now be overexposed to smallcaps compared to their intended asset allocation to which Dhawan suggests this is a prudent time to review and rebalance portfolios, especially if smallcap weights have become excessive. Instead of increasing exposure further, investors should trim excess holdings and return to their target asset mix and avoid lump-sum investments in smallcaps at current levels; if you're investing with a 10-year horizon, consider SIP or STP routes for gradual June, small cap funds received an inflow of Rs 4,024 crore registering a growth of 25% on monthly basis from Rs 3,214 crore in May. On the other hand, another risky category to gain investors' interest was mid cap fund which received an inflow of Rs 3,754 crore in June registering a growth of 34% on monthly basis from Rs 2,808 crore in the current calendar year so far till June 30, small cap funds received a total inflow of Rs 24,774 crore whereas mid cap funds received a total inflow of Rs 21,870 are increasingly looking to tap into the faster-growing segments of the economy, as seen in their rising preference for mid-cap and small-cap funds and broad-based market gains, including a surge in the Nifty 50 index and even stronger rallies in the mid- and small-cap indices, helped reignite interest in equity investments, Dhawan have the mutual fund inflows into small cap funds contributed to recent outperformance? As a response, Dhawan firmly says yes, to an extent, recent small-cap rallies were primarily to retail and mutual fund inflows, which helped push valuations higher after prior underperformance.'DIIs (including mutual funds and insurance companies) have been pumping steady flows into equity markets. With domestic flows (DII) now a structural force driven by SIPs and rising financialization, the impact of these flows on market segments like small caps has intensified,' the expert at the recent performance of one month, the small cap funds were in the red zone though they lost marginally 0.10% whereas in the three months they gained nearly 11%.According to Dhawan, small-cap indices and funds are currently trading at a premium to their long-term averages, raising concerns about near-term return potential and at present, earnings growth does not justify the stretched valuations, especially amid ongoing global macro uncertainties.'Given their inherent volatility, small caps are highly sensitive to economic shocks and tend to correct sharply at the first sign of caution. In this context, it may be prudent to shift focus toward relatively lower-risk sectors,' said the last five and 10 years, post small cap funds, the next in the return chart were sectoral and thematic funds. Are there any sectoral or thematic funds that can give similar returns?As of now, the Banking and Financial Services sector looks attractive as it has underperformed due to concerns on divergence between credit and deposit growth, a lowering of the net interest margins, and asset quality and with the RBI initiating liquidity-supportive measures and the broader macroeconomic environment remaining conducive, the outlook for the sector appears strong.'Importantly, the banking sector is currently trading at a discount to its historical valuations, offering an attractive entry point for investors seeking stability with growth potential. It is critical to invest with a 3-5 year investment horizon,' he cap schemes invest in very small companies or their stocks. That is why investing in small cap stocks is considered extremely risky. The small cap segment can be extremely volatile in the short term, but they have the potential to offer very high returns over a long period. Small cap schemes are recommended only to aggressive investors with a high-risk appetite and long investment horizon, say, around seven to 10 years. ETMutualFunds do not recommend small cap schemes to new and inexperienced investors.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times. One should always consider their risk appetite, investment horizon and goals before making any investment you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and twitter handle)
Economic Times
11-07-2025
- Business
- Economic Times
Investors' pour Rs 47,000 crore in midcap & smallcap mutual funds in H1 CY25. What are they really chasing?
Midcap and smallcap funds have seen significant inflows, fueled by past returns and FOMO, raising concerns about high valuations and potential earnings disappointments. With investors' showing clear preference for midcap and smallcap mutual funds by pouring Rs 47,000 crore in the first half of the current calendar year and the categories offering good returns, market experts are of the view that these inflows have been driven by higher trailing returns in recent years, and the fear of missing out (FOMO) may also be pushing investors to chase past performance.'These returns may not always be backed by sustainable earnings growth and other fundamentals of the underlying companies and thus investors may need to be cautious. Also, past returns can result in mis-selling and pushing such funds easily to retail investors,' Vishal Dhawan, CEO, Plan Ahead Wealth Advisors, a wealth management firm in Mumbai told ETMutualFunds. Also Read | Midcap and smallcap mutual funds witness surge in inflows. Is investor confidence back? Considering this as a concern, Dhawan mentioned that the current valuations in mid and small caps are well above historical averages, leaving little margin for error if earnings disappoint and also, based on trailing returns investors may enter with high return expectations, only to be disappointed if the segment underperforms or corrects. In the first half of the current calendar year, mid cap funds received a total inflow of Rs 21,870 crore whereas small cap funds received an inflow of Rs 24,774 crore in the same period. Another expert cautions investors that they should invest in mid and small caps only with a slightly longer-term horizon compared to largecaps and also be ready with slightly higher volatility given that these segments are trading at a higher valuation. 'We are not negative on mid and smallcaps. So, we are just saying that if you are coming into mid and smallcap strategies, please do come with a slightly longer-term horizon compared to largecaps and also be ready with slightly higher volatility given that they are trading at a higher valuation and that is what our view has been,' Harsha Upadhyaya, CIO-Equity, Kotak AMC told the categories are currently trading at a higher valuation and are receiving heavy inflows, Dhawan mentioned that investors often fall prey to herd mentality, chasing recent winners like small and mid-cap funds assuming past returns will be replicated in the future, the current forward valuations in the small and mid-cap space are still significantly above their long-term averages, therefore this space lacks valuation comfort, and these segments are more volatile and sensitive to earnings disappointments or any weak on one's risk appetite and investment horizon, allocation to small and mid-cap funds can range between 10% to 30% of the portfolio and the large-cap segment offers more reasonable valuations currently and can be a major part of the portfolio providing stability and downside protection, is what Dhawan advised. Also Read | Gold ETFs: 600% surge in monthly inflows to Rs 2,080 crore. Are you late to the party? Though midcap and smallcap funds have been on the lower side of the return chart in the current calendar year so far (till June 30) but since April's low, mid cap funds have gained 20% and small caps have gained nearly 21%.On April 7 the benchmark index was at the level of 73,137, the lowest in the current financial year so far. After looking at the recent inflow trend, returns offered, and recent valuations in the mid cap and small cap categories, Dhawan recommends investors that a staggered investment approach through SIP or STP is wiser than a selective exposure to mid and smallcap funds can still be beneficial for long-term goals, it's crucial to limit allocation based on risk profile and focus on consistent, disciplined investing rather than timing the market and selective allocation, backed by earnings visibility and reasonable valuations, may be key to navigating this space wisely, Dhawan investors tend to follow the inflow trend and invest where others are investing and putting their money and the categories which are delivering high returns, which deviates them from their asset allocation and risk profile. Many experts always advise choosing a fund based on their risk appetite, investment horizon and goals and follow the addition to this, Dhawan recommends that chasing inflow trends is never a wise strategy, such moves are often driven by FOMO, leading investors to enter at peak valuations and see downsides during corrections and inflows are not a reliable indicator for making investment adds that focusing on the long-term asset allocation and risk profile ensures that the portfolio is aligned with the goals and capacity to handle volatility. 'Staying disciplined avoids emotional, peer driven decisions and encourages better rebalancing and long-term wealth creation. A diversified approach offers far more stability than trend-chasing, especially in uncertain market phases,' Dhawan shared. Also Read | Parag Parikh Flexi Cap Fund increases stake in ITC, Coal India, and 10 other stocks in June Post analysing the recent flow of returns and categories receiving inflows, Dhawan is of the opinion that the outlook for mid and small-cap funds remains cautious and the future performance will be driven by earnings growth of the underlying businesses, which will indicate whether the current high valuations are justified by actual earnings and business growth.'While long-term structural tailwinds remain fine, near-term corrections cannot be ruled out due to elevated valuations and recent developments such as geopolitical tensions, trade tariffs, and Wars,' he adds. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Time of India
11-07-2025
- Business
- Time of India
Investors' pour Rs 47,000 crore in midcap & smallcap mutual funds in H1 CY25. What are they really chasing?
Midcap and smallcap mutual funds attract significant investor interest. These funds received Rs 47,000 crore in the first half of the year. Experts advise caution due to high valuations. They suggest a longer investment horizon. Investors should also prepare for potential volatility. A staggered investment approach is recommended. Focus on long-term asset allocation and risk profile is crucial. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads With investors' showing clear preference for midcap and smallcap mutual funds by pouring Rs 47,000 crore in the first half of the current calendar year and the categories offering good returns , market experts are of the view that these inflows have been driven by higher trailing returns in recent years, and the fear of missing out (FOMO) may also be pushing investors to chase past performance 'These returns may not always be backed by sustainable earnings growth and other fundamentals of the underlying companies and thus investors may need to be cautious. Also, past returns can result in mis-selling and pushing such funds easily to retail investors,' Vishal Dhawan, CEO, Plan Ahead Wealth Advisors, a wealth management firm in Mumbai told this as a concern, Dhawan mentioned that the current valuations in mid and small caps are well above historical averages, leaving little margin for error if earnings disappoint and also, based on trailing returns investors may enter with high return expectations, only to be disappointed if the segment underperforms or the first half of the current calendar year, mid cap funds received a total inflow of Rs 21,870 crore whereas small cap funds received an inflow of Rs 24,774 crore in the same expert cautions investors that they should invest in mid and small caps only with a slightly longer-term horizon compared to largecaps and also be ready with slightly higher volatility given that these segments are trading at a higher valuation.'We are not negative on mid and smallcaps. So, we are just saying that if you are coming into mid and smallcap strategies, please do come with a slightly longer-term horizon compared to largecaps and also be ready with slightly higher volatility given that they are trading at a higher valuation and that is what our view has been,' Harsha Upadhyaya, CIO-Equity, Kotak AMC told the categories are currently trading at a higher valuation and are receiving heavy inflows, Dhawan mentioned that investors often fall prey to herd mentality, chasing recent winners like small and mid-cap funds assuming past returns will be replicated in the future, the current forward valuations in the small and mid-cap space are still significantly above their long-term averages, therefore this space lacks valuation comfort, and these segments are more volatile and sensitive to earnings disappointments or any weak on one's risk appetite and investment horizon, allocation to small and mid-cap funds can range between 10% to 30% of the portfolio and the large-cap segment offers more reasonable valuations currently and can be a major part of the portfolio providing stability and downside protection, is what Dhawan midcap and smallcap funds have been on the lower side of the return chart in the current calendar year so far (till June 30) but since April's low, mid cap funds have gained 20% and small caps have gained nearly 21%.On April 7 the benchmark index was at the level of 73,137, the lowest in the current financial year so looking at the recent inflow trend, returns offered, and recent valuations in the mid cap and small cap categories, Dhawan recommends investors that a staggered investment approach through SIP or STP is wiser than a selective exposure to mid and smallcap funds can still be beneficial for long-term goals, it's crucial to limit allocation based on risk profile and focus on consistent, disciplined investing rather than timing the market and selective allocation, backed by earnings visibility and reasonable valuations, may be key to navigating this space wisely, Dhawan investors tend to follow the inflow trend and invest where others are investing and putting their money and the categories which are delivering high returns, which deviates them from their asset allocation and risk profile. Many experts always advise choosing a fund based on their risk appetite, investment horizon and goals and follow the addition to this, Dhawan recommends that chasing inflow trends is never a wise strategy, such moves are often driven by FOMO, leading investors to enter at peak valuations and see downsides during corrections and inflows are not a reliable indicator for making investment adds that focusing on the long-term asset allocation and risk profile ensures that the portfolio is aligned with the goals and capacity to handle volatility.'Staying disciplined avoids emotional, peer driven decisions and encourages better rebalancing and long-term wealth creation. A diversified approach offers far more stability than trend-chasing, especially in uncertain market phases,' Dhawan analysing the recent flow of returns and categories receiving inflows, Dhawan is of the opinion that the outlook for mid and small-cap funds remains cautious and the future performance will be driven by earnings growth of the underlying businesses, which will indicate whether the current high valuations are justified by actual earnings and business growth.'While long-term structural tailwinds remain fine, near-term corrections cannot be ruled out due to elevated valuations and recent developments such as geopolitical tensions, trade tariffs, and Wars,' he adds.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
