Latest news with #SaileshJain
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Business Standard
13 hours ago
- Business
- Business Standard
Funds flexing 60/40 playbook becoming investor favourites in India
The growing demand for hybrid funds may indicate the huge popularity of equity investments is starting to wane in the world's most populous economy Bloomberg Indian funds that offer built-in diversification by combining stocks with assets such as bonds and gold lured in more money than pure equity ones last month for the first time in a year, pointing toward a potential long-term investment shift. The so-called hybrid plans attracted a net ₹208 billion ($2.4 billion) of inflows in May, while stock funds garnered just ₹190 billion , according to data from the Association of Mutual Funds in India. The switch comes as global geopolitical turmoil escalates and Indian equities trail their worldwide peers amid concern over weaker earnings growth. 'Investors are taking a break and are hedging some of their assets into hybrid funds,' said Sailesh Jain, who oversees more than $4 billion as a money manager at Tata Asset Management Pvt in Mumbai. 'These funds are a perfect mix during such uncertain times as they offer growth potential by staggering equity investments and generate income through debt investments.' Potential buyers are also shying away from Indian shares as they appear pricey based on valuation metrics, while interest in pure bond funds has been damped by the diminishing prospect of future central bank interest-rate cuts, Jain said. The two most popular categories of hybrid funds in May were multi-asset and arbitrage schemes. The former must have investments in at least three asset classes with a minimum allocation of at least 10 per cent in each, according to the market regulator's guidelines. The latter must have a minimum of 65 per cent in equities or equity-related products, and a maximum of 35 per cent in debt. One of the advantages of hybrid funds is their tax efficiency. Arbitrage funds that invest both in stocks and bonds are taxed at the same rate as stocks, even though they offer exposure to debt. Pure bond funds, on the other hand, are taxed at a higher rate. Multi-asset funds that invest in precious metals such as gold have also lured in higher inflows due to the record-breaking rally in bullion. Such funds saw their assets under management climb to an all-time high of 1.2 trillion rupees at the end of May, based on data from the mutual fund association. The performance of Indian stocks has started to improve in recent months, with the MSCI India gauge climbing about 16 per cent from a one-year low set in February. At the same time, recent threats such as rising global trade frictions and geopolitical conflicts still argue for diversification. 'Given persistent geopolitical headwinds, hybrid funds may offer better risk-reward notably in the context of India's expensive valuations and sluggish earnings growth,' said Nitin Chanduka, a strategist at Bloomberg Intelligence in Singapore.
Time of India
14 hours ago
- Business
- Time of India
Funds flexing 60/40 playbook become investor favorites in India
Indian hybrid funds, blending stocks with assets like bonds and gold, have outpaced pure equity funds in attracting investments for the first time in a year, signaling a potential investment trend. In May, these hybrid plans garnered 208 billion rupees, exceeding the 190 billion rupees drawn by stock funds. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Indian funds that offer built-in diversification by combining stocks with assets such as bonds and gold lured in more money than pure equity ones last month for the first time in a year, pointing toward a potential long-term investment so-called hybrid plans attracted a net 208 billion rupees ($2.4 billion) of inflows in May, while stock funds garnered just 190 billion rupees, according to data from the Association of Mutual Funds in India. The switch comes as global geopolitical turmoil escalates and Indian equities trail their worldwide peers amid concern over weaker earnings growth.'Investors are taking a break and are hedging some of their assets into hybrid funds ,' said Sailesh Jain, who oversees more than $4 billion as a money manager at Tata Asset Management Pvt in Mumbai. 'These funds are a perfect mix during such uncertain times as they offer growth potential by staggering equity investments and generate income through debt investments.'Potential buyers are also shying away from Indian shares as they appear pricey based on valuation metrics, while interest in pure bond funds has been damped by the diminishing prospect of future central bank interest-rate cuts, Jain growing demand for hybrid funds may indicate the huge popularity of equity investments is starting to wane in the world's most populous economy. The flow of money from retail investors into the stock market has been one of the drivers helping the MSCI India Index deliver average gains of almost 15% a year over the past six years, outpacing most of its global two most popular categories of hybrid funds in May were multi-asset and arbitrage schemes . The former must have investments in at least three asset classes with a minimum allocation of at least 10% in each, according to the market regulator's guidelines. The latter must have a minimum of 65% in equities or equity-related products, and a maximum of 35% in of the advantages of hybrid funds is their tax efficiency. Arbitrage funds that invest both in stocks and bonds are taxed at the same rate as stocks, even though they offer exposure to debt. Pure bond funds, on the other hand, are taxed at a higher rate. Multi-asset funds that invest in precious metals such as gold have also lured in higher inflows due to the record-breaking rally in bullion. Such funds saw their assets under management climb to an all-time high of 1.2 trillion rupees at the end of May, based on data from the mutual fund performance of Indian stocks has started to improve in recent months, with the MSCI India gauge climbing about 16% from a one-year low set in February. At the same time, recent threats such as rising global trade frictions and geopolitical conflicts still argue for diversification.'Given persistent geopolitical headwinds, hybrid funds may offer better risk-reward notably in the context of India's expensive valuations and sluggish earnings growth,' said Nitin Chanduka, a strategist at Bloomberg Intelligence in Singapore.
Time of India
05-05-2025
- Business
- Time of India
NFO Update: Tata Asset Management launches Income Plus Arbitrage Active FoF
The Tata Income Plus Arbitrage Active FoF is tailored for investors with a two-year horizon, aiming for stable, accrual-based, and tax-efficient returns. The fund invests up to 65% in Tata Corporate Bond Fund and at least 35% in Tata Arbitrage Fund Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in MF Tata Asset Management has announced the launch of Tata Income Plus Arbitrage Active Fund of Fund , an innovative fund of fund scheme aiming to blend the low-volatility strategy of arbitrage funds with steady accrual potential of high-quality corporate new fund offer or NFO of the scheme is open for subscription and will close on May 19, Read | 52% equity mutual funds outperform against their benchmarks in 3 years This open-ended fund of funds investing in domestic mutual fund schemes offers a versatile solution to investors through a balanced mix of interest earned on corporate bonds and equity arbitrage Tata Income Plus Arbitrage Active FoF is designed for investors with a two-year horizon, seeking potentially stable, accrual-oriented and tax-efficient returns. The fund allocates a maximum of 65% to Tata Corporate Bond Fund and minimum of 35% to Tata Arbitrage Fund , combining the stability of debt with tax efficient returns when a horizon of two years is Tata Arbitrage Fund, with its 100% hedged equity portfolio, aims for short-term stable gains, while the Tata Corporate Bond fund focusses on accrual returns with selective duration management. This blend, wrapped under a 'Fund of Fund' structure, offers a balanced approach with better tax efficiency than standalone arbitrage or corporate bond funds when held for over two years."In the current environment where debt yields are attractive and volatility in equity market persists, a hybrid strategy like this can potentially offer superior post-tax returns compared to traditional debt funds," said Sailesh Jain, Fund Manager, Tata Asset Management. "The fund's active allocation and smart liquidity management aim at optimizing returns."Arbitrage and hybrid strategies have gained traction in recent years as investors look for alternatives that combine the relative safety of debt with the tax efficiency and flexibility of equity-linked Read | 88% equity mutual funds offer negative returns in 2025, lose up to 21% The key features of the Tata Income Plus Arbitrage Active FoF include a minimum investment amount of Rs 5,000, equity taxation benefits after two years, and a modest exit load of 0.25% if redeemed within 30 Asset Management continues to reinforce its commitment to offering investors well-researched, innovative solutions that align with the changing market dynamics and long-term wealth creation goals.
