MF investors rush into 'hot sectors', draw caution
equity mutual funds in the past three months thanks to a slew of product launches.
The strong appetite has helped thematic and sector funds emerge as the largest category in terms of money managed among equity mutual funds, raising concerns that investors might be chasing the latest fads in the market.
Over the last three months, thematic and sectoral funds attracted about ₹60,000 crore, out of the ₹1.12 lakh crore flows into equity mutual fund schemes. This is now the biggest equity mutual fund category, ahead of flexi-cap, with assets of ₹4.21 lakh crore, according to Association of Mutual Funds of India (AMFI). The mutual fund industry managed equity money to the tune of ₹28.5 crore as on July 31. Most of the flows into thematic and sector funds are lump sum investments into new fund offers (NFOs), said mutual fund distributors.
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«The uninterrupted market rally over the past 1-2 years has led to a spate of NFOs, particularly in the sectoral/thematic segments,» said Roshni Nayak, founder, Goalbridge, a Sebi registered investment advisor. «Retail investors primarily invest in such NFOs, allured by the spectacular rally in these themes.»
There has been a spate of new fund offer (NFOs) in themes or sectors such as manufacturing, energy, business cycle, special opportunities, defence and PSUs. Among the large NFOs from the top fund houses, HDFC Manufacturing Fund raised ₹9,500 crore, SBI Energy Opportunities
