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Changing Dynamics: Smaller fund houses outpace major players in 2021

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Mutual-Fund

The mutual fund space has grown over the pandemic and interestingly so far in 2021, several smaller companies have gained momentum and outpaced the growth of established major players.

In tandem with the rise in the equity market, small players made giant strides during the year.

Equity schemes of fund houses like Quant Mutual Fund, ITI Mutual Fund, PPFAS Mutual have been among the best performing schemes so far in the year.

The assets under management of Quant witnessed over five-fold rise during January-July 2021. Its AUM in December 2020 stood at Rs 521 crore and by July-end it reached Rs 2,842 crore, showed data from primemfdatabase.com.

The AUM of ITI Mutual Fund rose over 100 per cent to Rs 1,879 crore and PPFAS Mutual Fund’s AUM also nearly doubled to Rs 14,318 crore.

Some of the schemes of relatively new fund houses have given blockbuster returns with several of them coming from Quant Mutual Fund. As per the market estimates, ICICI Prudential Technology Fund, Quant Tax Plan Fund, PGIM India Midcap Opportunities Fund, Quant Infrastructure Fund and Quant Active Fund are the top five equity funds giving best returns ranging from 80 per cent to over 100 per cent.

Kotak Mahindra Mutual Fund, a major player in the segment, has the highest AUM of over Rs 2.58 lakh crore as of July 2021, 13 per cent higher than Rs 22.78 lakh crore, the Prime Database data showed.

According to Pranav Haldea, Managing Director of Prime Database Group, the higher growth rate of AUM of smaller fund houses is due to low base effect along with their identification of specialised offerings.

“One reason is low base effect, and second I think smaller fund houses have done a commendable job in terms of identifying niches where they have specialised,” he told IANS.

He further said that performance of these mutual funds along with the incumbent giants will continue to be robust.

“The sort of AUM growth which you have seen in the mutual fund industry in the five odd years, the AUM now stands at close to 35-36 lakh crores. So the growth of these smaller fund houses will also extract a fair share of that growth,” he said.

Haldea told IANS that the growth will continue because there will be more channellising of retail savings into mutual funds going forward.

More and more retail investors in the last one and half years have come to the capital market as various other kinds of investment markets are not providing the investment returns that they are used to.

“So retail investors are increasingly looking at equity and the markets obviously are supportive and the markets are doing really well,” he said.

N.S. Venkatesh, Chief Executive, Association of Mutual Funds in India (AMFI) said: “Mutual Funds have emerged as the preferred savings-cum-investment avenue over the last few years, and the pandemic has actually triggered this shift towards Mutual Funds in a more pronounced way.”

This shift will continue in 2021 and beyond, accentuated by Sebi-driven initiatives towards transparency and disclosures, he said.

“Over the years, mutual fund industry too, has deepened its penetration, beyond top 15 cities, even as number of MF players has risen with new fund houses coming in to mutual fund industry, enabling steady but sure rise in the number of investors who have been embracing mutual funds as the preferred savings tool,” Venkatesh said.

The number of mutual fund investors in the country has doubled to 2.39 crore as of June 30, 2021 from 1.19 crore at the end of March 2017, thereby indicating that pandemic has actually had no impact on the inflows, he added.

The mutual fund industry AUM rose 4.9 per cent in July 2021 to a record Rs 35.3 lakh crore due to inflows into both equity funds and debt funds

An ICICI Direct Research report said that IT funds have been consistent outperformers in the last two to three years as the growth outlook improved for the sector in the post Covid world resulting in valuation re-rating of most stocks.

The sectors or segments like infrastructure, PSUs that lagged behind in the early part of the rally, have started to gain traction indicating the healthy trend of sector rotation, it said.

“Small cap funds have been consistent outperformers in the last one year after they were beaten down during the Covid pandemic induced market fall. Midcaps also followed small cap funds and have outperformed other categories. However, there seemed to be some profit booking recently as it underperformed in the last one month,” it said.

International

Trump signs proclamation banning travel from 12 nations

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Washington, June 5: US President Donald Trump has signed a proclamation imposing a travel ban on 12 countries and restricting the entry of seven others to the US, citing national security concerns.

According to the proclamation, the 12 countries that were banned include Afghanistan, Burma, Chad, Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan, and Yemen.

Additionally, the order partially restricts and limits the entry of nationals of the following seven countries — Burundi, Cuba, Laos, Sierra Leone, Togo, Turkmenistan, and Venezuela.

The announcement of the ban followed a recent violent terror attack in Boulder, Colorado, on participants of a peaceful rally calling for the safe return of Israeli hostages from Hamas captivity.

“The recent terror attack in Boulder, Colorado, has underscored the extreme dangers posed to our country by the entry of foreign nationals who are not properly vetted, as well as those who come here as temporary visitors and overstay their visas. We don’t want them,” Trump said in a video statement released by the White House on Wednesday night.

Meanwhile, US Homeland Security officials said that the terror attack perpetrator in Colorado, Mohammed Sabry Solima, was allowed entry into the country under the former Biden Administration and overstayed his visa.

The White House Deputy Press Secretary Abigail Jackson took to social media stating that President Trump is protecting Americans from foreign actors who pose security threats to the country.

“President Trump is fulfilling his promise to protect Americans from dangerous foreign actors that want to come to our country and cause us harm. These commonsense restrictions are country-specific and include places that lack proper vetting, exhibit high visa overstay rates, or fail to share identity and threat information. President Trump will always act in the best of interest of the American people and their safety,” Abigail Jackson said on X.

The recent proclamation echoed a series of travel bans issued during the first term of Trump’s administration to seven majority-Muslim nations from coming to the US.

It included Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen. The move witnessed legal challenges before President Joe Biden repealed it after he assumed office in 2021.

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Crime

NIA raids multiple locations in Kashmir in terror funding-conspiracy case

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Srinagar, June 5: Sleuths of the National Investigation Agency (NIA) on Thursday carried out raids at multiple locations in Kashmir Valley as officials said these raids are part of an ongoing investigation into a terror funding and conspiracy case.

Assisted by police and the CRPF, NIA sleuths raided many locations in the Reban area of Shopian district, Nildoora and Chak-e-Choland in Kulgam district; Manzgam, Devsar, Sonigam and Bugam in Pulwama district; Sopore in Baramulla district and Kupwara district.

Reports said the NIA raids are going on at 32 locations in Jammu and Kashmir.

NIA sources said a statement would be issued by the agency after the conclusion of the day’s operations by its sleuths.

By the time this report was filed, there was no information available regarding any arrests or recoveries.

More details are awaited.

Sources said the searches were being conducted in a terror conspiracy case against overground workers (OGWs) of various terrorist organisations.

All high-profile crimes, including some dastardly terror attacks in the union territory, are being investigated by the NIA. The April 22 terror attack carried out by the Lashkar-e-Taiba (LeT) outfit in Baisaran meadow of Pahalgam is also being investigated by the NIA.

Terrorists killed 26 civilians, including one Naeplai national, after segregating them on the basis of religion in Baisaran. The innocent victims of terrorists included 25 tourists and a local pony owner who sacrificed his life while trying to save the tourists. All the victims, except one, were Hindus.

NIA is also investigating the Reasi terror attack carried out by terrorists on June 9, 2024, on a bus carrying pilgrims. Nine pilgrims were killed and 33 others, including women and children. They were killed when terrorists attacked a bus carrying pilgrims to Katra from the Shiv Khori temple.

The NIA arrested and investigated cases against JKLF chief, Yasin Malik, senior separatist leaders, Shabir Shah, Nayeem Khan and MP Engineer Rashid.

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National

Drama of discontent in Mahayuti govt due to greed for power: Uddhav Thackeray’s Saamana

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Mumbai, June 5: Shiv Sena(UBT) on Thursday claimed that a strong discontent was brewing in the grand alliance (Mahayuti) government of Maharashtra, and the people were getting “free entertainment” from the inner fight.

Thackeray camp in the party’s mouthpiece ‘Saamana’ editorial said, “No matter which party the government belongs to, those who are dissatisfied in the government have no party. The Mindhe Mandal (Shinde camp) was dissatisfied with Uddhav Thackeray’s government, and now their dissatisfaction continues with the Fadnavis government as well. The root of the disease of dissatisfaction lies in power, greed for position, money, ego and political ambition. There is no cure for this disease of dissatisfaction. Once it takes root, it grows stronger. Let us hope that the dissatisfaction drama in the three parties that is going on in the Fadnavis government should not lead to gang wars from breaking out within the cabinet in the future.”

“The Mindhe group (Shinde camp) in the cabinet is unhappy with Finance Minister Ajit Pawar. Money or ‘funds’ is said to be the main reason for the discontent. In other words, the old disease has once again revived. The same discontent and complaint of the Mindhe group (Shinde camp) were present while breaking the Shiv Sena and toppling the Maha Vikas Aghadi government. It continues. The same root cause of discontent has again bedevilled the ministers of Mindhe. At that time, the people of Mindhe had considered Ajit Pawar a ‘villain’ while being dishonest with the original Shiv Sena,” the editorial said..

“However, instead of going to jail, Ajit Pawar followed in Mindhya’s footsteps, entered the government and became the Finance Minister. Ultimately, all ministries have to look at and depend on the finance ministry for the allocation and release of funds. In a nutshell, many people’s lives were ruined because Ajitdada controls the funds of the government,” claimed the Thackeray camp.

“After the cabinet meeting held last Tuesday, the displeasure of the ministers, who were upset over the lack of funds, erupted. Thereafter, the Mindhe group ministers met and complained against Ajitdada for not releasing funds to their respective departments. They expressed their discontent against Ajitdada in front of their leader, Mindhe (Eknath Shinde). ‘Finance Minister Ajitdada is sabotaging the development works of our department. If the finance department and the finance minister will not give us money, how will we do development works?” asked the disgruntled ministers from the Shinde camp. It is said that Ajitdada was the sole target during the meeting,” said the editorial.

“In the same meeting held last week, Deputy Chief Minister Shinde independently reviewed the functioning of the departments held by the Mindhe group and individually discussed with the concerned ministers to know the present status. The agitated ministers raised a slew of questions, such as how the work will be done for want of funds. If the work is not done, how will we face the elections and what answers will we give to the people?” said the editorial.

Since the nature of the complaint and ‘target’ were the same, Dy CM Shinde attempted to pacify them, assuring that he would find a way out by talking to Chief Minister Devendra Fadnavis and Dy CM Ajitdada Pawar.

“In fact, in the Mahayuti government, the Mindhe (Eknath Shinde) himself is being beaten with sticks, and there is no way to bombard this disgruntlement again. So, he was upset and had to go to the native village in Satara and count the strawberries in the fields. As Mindhe (Eknath Shinde) had found a solution to overcome disgruntlement by going to the native village, it is difficult to guess whether he has suggested a similar solution to the disgruntled ministers from his camp,” said the editorial. However, at the end of the day, the people of Maharashtra have to bear the discontent among the ruling partners.

Furthermore, the Thackeray camp claimed that it was not just the Shinde camp but the BJP legislators who met Home Minister Amit Shah and lodged a complaint against Finance Minister Ajitdada Pawar.

“Amit Shah gave his party legislators the ideal mantra of the double engine government, ‘Keep doing work and follow up with Ajitdada so much that he himself should come to me with a complaint’. This is such an interesting drama going on in the grand alliance government in Maharashtra. If Ajit Pawar is bringing the BJP, which has 132 MLAs, and the Mindhe Party formed by Amit Shah to the table, then only Ajit Pawar is happy in this government, and this is a great skill of Ajitdada,” the editorial said.

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