Quantum View


  • Jan 02, 2017
    Nilesh Shetty - Associate Fund Manager - Equity

    The year gone by..

    The Year started off on a pessimistic note with equity markets moving sharply lower as weak corporate earnings belied lofty valuations. Rural India was particularly struggling on the back of two successive droughts. The government, albeit a bit late, realised the same and tilted the orientation of its budget to address the concerns of rural India. After the clouds came the silver lining. The weatherman forecasted above normal monsoons, so equity markets cheered and started moving higher. FII Flows, which had been negative till February, quickly reversed and India again became the standout emerging market poised to show strong economic growth while others were struggling.

    Despite the strong growth suggested by the new GDP series, the fact remains that for the last three years, most companies have faced weak consumer demand. Hopes of an economic recovery were belied each year as company after company delivered weak earnings growth. This year a combination of economic factors meant the story of a possible economic recovery had real credibility. Rural income was poised to pick up after two successive droughts. Lower interest rates, the seventh pay commission, and “one rank one pension” payouts suggested a positive outlook. Government finances as well as India’s external account looked well under control. All these factors pointed to an economy on the cusp of a leap in consumer discretionary spend. Equity markets reacted appropriately and continued to rally in anticipation of the same. But then the Government launched what may eventually become one of the most ill-planned and executed schemes in the history of modern India. On Nov 8 the government launched a currency exchange scheme which delegitimised 85% of the cash in circulation. Cash available for transactions suddenly disappeared, while new cash with limited printing capacity was not even close to filling the gap. FII’s staring at rising international yields and an uncertain economic impact of the policy decided to bail, reversing the prior strong flows.

    The government’s launch of the demonetisation scheme has now become a textbook case of how not to execute a currency exchange program. No sooner was the announcement made to replace old currency notes than immediately a parallel economy to convert ill-gotten cash sprung up. What ensued was a race between economic agents – taking advantage of the situation with ingenious avenues to convert cash – and the RBI, as it introduced a flurry of rules every day to stem this conversion. The pace at which cash came gushing back into the banking system belied any hopes of major recovery of black money held in cash. After the first few days most people gave up on trying to keep up with the daily rule changes and just wanted to get some cash out of the bank to get back to their daily lives. The government finally threw in the towel by launching the Income declaration scheme which now ensures all the money will come back into the system. Looking at the economic costs involved with loss of productivity, lower revenues, loss of taxes, and stalling of the consumption cycle, the payoffs could never justify whatever the government was trying to achieve. Given that the upcoming implementation of the GST will make it increasingly difficult for the informal sector to under-declare revenues, one wonders why this scheme was even necessary.

    Internationally two major events marked the calendar year, both unexpected and misforecasted by pundits: Britain voted to leave the European Union and Donald Trump won the US presidential election. Both events were a result of populations reacting to years of stalled economic activity and negligible wage growth, trying to find avenues to change the status quo. The worrying aspect remains how disconnected the mainstream media has become with ground realities. Both outcomes were originally thought to be low probability by the media and ended up being a major shock when the actual results were declared. They signify that we may over the next few years see a world which is a lot more insular and protectionist in policymaking. One may also see economic costs being imposed on businesses which thrive on the free movement of goods and labour.

    Outlook
    Demonetisation has come at a crucial time for the Indian economy. Companies that were looking at a strong economic revival – especially the ones linked to consumer discretionary spend – are now staring at a sharp drop in revenues in H2FY17. Our channel check with companies suggests that even a full month after demonetisation, demand remains ~30%-50% below normal. The popular expectation that consumer demand will come rushing back once cash in the system normalises is looking more and more like wishful thinking. Lower demand leads to lower income leads to lower wage growth/job losses; the exact opposite of a virtuous economic cycle. The government may be forced to launch a stimulus program to break out of this descent, putting pressure on its finances.

    The next few months could be testing for India as the population waits for a normalisation to take hold and becomes increasingly restless, potentially triggering a political backlash. Weak corporate performance coupled with rising international yields may test flows into India as FII’s look at other commodity-linked economies delivering stronger corporate performance. Rising government expenditures and increasing commodity prices internationally could let the inflation genie out of the bottle – a genie which has been tamed as of late. But India has never been a story for the near-sighted. The India story remains: 6.2% average GDP growth for the last 36 years! It is a story of skilful managements trying to meet the requirements of an underpenetrated 1.2 billion-person-market despite constrained infrastructure and erratic government policy. Any major correction would be a great opportunity for long term investors to solidify their equity portfolios by buying India low.


    Disclaimer, Statutory Details & Risk Factors:

    The views expressed here in this article are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

    Mutual fund investments are subject to market risks read all scheme related documents carefully.

    Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

  • Jan 02, 2017
    Murthy Nagarajan - Head - Fixed Income

    The year gone by..

    The year 2016 was an eventful year for the bond markets. The government stuck to its fiscal deficit target of 3.7 % as per the FRBM target against market expectation of a hike in fiscal deficit. The RBI also changed its stance on system liquidity from deficit to bringing the system liquidity to neutral over a period of time. The RBI did conduct Open Market Purchases of Government securities amounting to Rs. 110000 crores in order to infuse liquidity into the system. The yields on ten year government bonds, which had touched 7.90 % levels before the budget, fell to 7.25 % levels after these events. The RBI also started providing liquidity via longer tenure term repos to even out a call money spike at quarter end due to frictional liquidity created in the system.

    CPI inflation was high in the first half, primarily due to high food inflation – notably in vegetables and pulses – on the heels of two consecutive years of drought. The Southwest monsoon for the current year was normal at 97 % of the long period average of 10 years. The total area sowed is 1071 Lakh hectares against normal sowing of 1064 Lakh hectares during the kharif season. The total area sowed under Rabi till 16th December 2016 is 256.19 Lakh hectares versus a normal area of 258.52 lakh hectares. Due to demonetisation, however, prices of perishables have come down: vegetable inflation is negative 6 %, while pulses have fallen by 22 % on a year on year basis. That said, the deflation caused due to excess pulse production has not percolated into retail prices yet, so this should provide some scope for CPI inflation to come down in the coming months. On the flip side, OPEC member production cuts amounting to 1.2 million barrels per day have sent Brent crude up to around USD 55 compared with USD 33 dollars at the beginning of the year. The Bloomberg Commodity index has risen a whopping 50 % during the current calendar year. Meanwhile, the government has raised the minimum wage by 42 % to Rs. 350, and this along with the implementation of the 7th Pay commission and introduction of GST  could led to higher CPI inflation in the coming months. We expect CPI inflation to average around 5 % next year due to these adverse factors.

    Global bond yields and currency fell with the election of Donald Trump as the US President. The President-elect is expected to increase infrastructure spending and cut corporate taxes, leading to higher fiscal deficits and higher Inflation. The Fed recently raised its Funds rate by 25 basis points, as non-farm payrolls have climbed 20 Million in 2016, CPI inflation has moved up to 1.6 %, and core inflation reached 2.2 % in November. The real surprise for the market was the Federal Open Market Committee saying it expects to hike the Funds rate by 25 basis points three times next year versus their September forecast of just two 2017 hikes. The US ten year Yield moved up from 1.65 % to 2.60 % levels. Emerging markets bonds sold off due to continuous FII outflows which led to their currency depreciating by 2 to 3 %. Out of cumulative outflows from emerging market of 23 billion USD after Donald Trump’s surprise win, India contributed nearly half: 10 billion USD in November across Equity and Debt. The cumulative debt outflow for the calendar year was only USD 7.5 billion due to the Indian currency remaining strong and capital appreciation in bonds.

    Outlook
    The monetary policy committee minutes release revealed a hawkish tone, with members worried about high oil prices, rising US yields and FII outflows from the Indian markets. It cites higher CPI inflation risks due to global economies recovering and the room for fiscal stimulus created by the US election. The room to cut rates does not now seem automatic. We expect CPI inflation to come around the 5 % band by March and we expect it to remain in that band of 4.5- 5 % in the subsequent financial year. We expect current GDP growth to fall to 4 % levels for the year, as we are factoring negative 4 % growth in the Dec 2016 quarter due to demonetisation. This will create pressure on the RBI to cut rates in February if the Government sticks to its fiscal deficit target. The ten year yield at 6.50% is already factoring in a 50 basis point rate cut, so there could be some volatility around that. We expect debt markets to be range bound and investors would be advised to invest in a short term bond fund or in a dynamic bond fund.

    Data Source: Bloomberg, RBI, Indiabudget.nic.in


    Disclaimer, Statutory Details & Risk Factors:

    The views expressed here in this article are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

    Mutual fund investments are subject to market risks read all scheme related documents carefully.

    Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

  • Jan 02, 2017
    Chirag Mehta - Senior Fund Manager - Alternative Investments

    The year gone by..

    2016 has been one of the most interesting years for gold that I have witnessed in many years. Importantly, breaking out from a string of yearly losses, this year gold delivered gains of +7%. We saw a number of shocking developments with central bank experiment getting more unconventional than one can imagine. At the other end of the spectrum were the more surprising outcomes like the Brexit or be it the Trump election win. However, the way the markets have reacted has been completely counterintuitive to expectations. One thing that clearly emerges from this year’s dramatic episodes is the move against anti establishment and towards de-globalization.

    The year started with a risk off environment following the first fed rate hike in December 2015. The risk off exacerbated with growing china slowdown and related currency devaluation concerns leading to a selloff in asset markets. As one would expect, central banks reacted to market turmoil by further unorthodox measures introducing negative rates for the first time ever. The central banks of Europe and Japan continued with the asset market purchases in their attempts to lift financial markets. Britain’s vote to exit the European Union further lifted gold prices. As central banks realized that their stance towards negative rates was not yielding desired results and just causing a big backlash from people as they became unsecure and rushed towards real asset like gold; they back paddled. This is when yields started to move up without any corresponding impact on inflation leading to improvement on real rates.

    Even with the uncertain outcomes like the Trump presidency and Italian referendum, gold prices have continued to fall. This has more to do with the sharp increase in yields post the trump win. The mere probability of the US economy improving under Trump’s presidency has financial markets bracing themselves for higher interest rates. Interest rates have gone up more than any increase in inflation expectations leading to higher real interest rates. All this has manifested into renewed dollar strength, tightening of credit spreads and positive stock markets; ensuring a correction in gold prices.

    Outlook

    The flipside of Trump Euphoria
    Much of the newly founded optimism is based on the view that Trump will be able to kick-start the US economy through his plans to spend up to a $1-trillion on infrastructure and other projects. With this spending and trade tariffs & regulations, he proposes to create new jobs and bring back jobs totaling 25 million jobs over 10 years. It is also potentially inflationary since it would put upward pressure on wages in America especially on the skilled labour side. If Trump succeeds in enacting laws that bring jobs back to the united sates in droves, it would certainly start to reverse the longstanding deflationary trend created by free trade and globalization and end up extremely inflationary and also create turmoil in emerging markets.

    Various estimates have put the cost of Trump’s proposed tax cuts at some $6 trillion over 10 years. In addition to this, Trump has also promised to boost infrastructure and military spending.  Obviously, this is a contradiction since it is not possible to effectively lower taxes without a corresponding reduction in government outlays. In reality, the plan will only help to boost the money supply growth rate. The resulting loose fiscal policy will increase government borrowings, which ultimately is going to be monetized by the US central bank.  Nothing in Trump’s plan suggests that he is aiming at generating more real wealth. His entire focus is to generate an increase in employment regardless of whether this increase in employment is in response to wealth generating activities or not. The second policy focus is tax cuts that may not seem sustainable or credible if there is no agenda to meaningfully shrink big government.

    Trump has been widely inconsistent on monetary policy coming out as both an opponent and supporter of low interest rates. One of the great challenges is likely to be the growing cost of financing the debt with interest rates creeping up. Also, a stronger dollar might encourage Donald Trump to lurch towards protectionism. The dollar appreciation in the 1980s pushed the US current account deficit to over 3% of GDP by 1986. This prompted then-President Reagan to pressure Japan to accept voluntary restraints on car exports to the US, and to agree the Plaza Accord designed to weaken the dollar. This time, all this may compel Trump to pressure the Fed to design policies to not only keep interest rates low but also intervene to weaken the dollar. Such a scenario can be extremely beneficial for gold.

    Fed, Real Rates and Gold
    US inflation expectations have been inching higher this year. Part of the increase in bond yields was likely on account of increasing inflation expectations which would compel the Fed to increase rates. However, since Trump’s becoming president elect, the rate of increase in nominal interest rates has exceeded the rate of increase in inflation expectations. This led to a scenario of higher real rates. In effect, over the past month economic growth expectations have risen faster than inflation expectations. As discussed above, in reality, Trumps proposed plan can actually quicken the pace of price inflation than what he can deliver on economic growth. This would eventually lead to a domino effect of rising inflation expectations and lowering of real interest rates. As real interest rates start to decline, the strength of the dollar would reverse and also make the lower end of the yield curve fall faster in anticipation of lower rate hikes. This will be extremely bullish for gold.

    Markets were playing the “lower for longer” theme.  If yields continue to increase it won't just be bond prices that will collapse but every asset that has been priced off that so called "risk free rate of return" offered by sovereign debt. The problem is that with such a leveraged economy, elevated asset prices, rising bond yields and the anticipation of further increase in rates may well cause risk premia to rise i.e. volatility in the market to increase, possibly causing overvalued equity markets to correct. The associated volatility may cause financial conditions to deteriorate as the Fed likes to put it, providing them enough excuse to abandon rate hikes. The anticipation of higher real rates may fizzle out yet again, providing support for the price of gold.

    The problems in Euro zone likely to get worse
    The United Kingdom’s Brexit decision has already dealt a heavy blow to peoples’ confidence in the European Union. The structural problems of the common currency bloc emanating from a common monetary policy make it fundamentally self defeating. The chances of the project stalling are now even greater, and the ties that bind the union together may even unravel. Doubts about its viability will exacerbate the economic misery especially of weak euro member states. Investment in these countries will slow down, further suppressing production and employment.

    More than ever, the survivability of euro banks is in the hands of the European Central Bank. However, the unhealthy liaison between the ECB and governments and banks in the euro area could now take a really bad turn as the stage is set for political upheaval in some European countries. The dynamic has now changed in German politics ever since the loss in popularity suffered by German Chancellor Angela Merkel last summer over the immigration issue. This means that it is extremely risky for the German leader to make further concessions towards fiscal union even if she wanted to with the German federal election due to be held in September 2017. This also translates into a loss of critical support for Draghi in terms of any future unorthodox measures he might want to introduce. The ensuing banking crisis can lead to a general worsening of economic conditions throughout Europe and widening of the already-large gaps between the performances of the relatively-strong and relatively-weak European economies.

    A banking crisis that emanates from Europe would not remain confined to Europe in today’s interconnected financial world. This could lead to concerns on banks health in U.S and elsewhere. This can suddenly translate to weakness in banking stocks and spillover to overall risk off sentiment in financial markets. The rush to safety will see bond yields moving lower faster than inflation expectations, resulting in lower real interest rates. Falling rates would also curtail rising hopes for further rate hikes from U.S Federal reserve and therefore be positive for gold. 


    Headwinds

    The current reflationary exuberance may persist into the first few weeks or may be months of Trump’s presidency. This would make real yields rise further. In which case the dollar will stay firm and gold will remain under pressure.

    However, we do not expect big downsides in gold as much of it is now baked into prices and rising yields will start showing negative effects on other aspects of the economy and asset markets as well. The prospects of a hike in interest rates have been rising faster than inflation expectations, which is bad for gold in the short term but we doubt this will continue for long. With the increase in commodity and energy prices, the labour market tightening and a hawkish trade policy could soon manifest into rapidly rising inflation expectations. The potential headwind for gold could arise from the proposed Trump tax plan of providing a onetime tax cut to incentivize repatriation of corporate money stashed abroad. This repatriation would lead to a large one-off boost to the Treasury’s revenues. However, history suggests that would just postpone the inevitable.

    There exist more uncertainties than certainties in the global macroeconomic environment of which Trump’s presidency is a big unknown. We believe that barring the near term, gold prices should start moving gradually upwards in 2017.

    Source: The World Gold Council, Bloomberg

    Disclaimer, Statutory Details & Risk Factors:

    The views expressed here in this article are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

    Mutual fund investments are subject to market risks read all scheme related documents carefully.

    Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

  • 22nd December, 2016

    The Missing Element in Financial Inclusion Initiatives

    Dear Investor,

    It is a fairly common belief that Indian equity markets are driven by fund flows from Foreign Institutional Investors (FIIs). Whenever FIIs are net buyers, our stock markets rise whereas when FIIs exit, our stock markets drop. This is a general trend that we have seen over the years. At times, we may observe remarkable variations in such trends. These variations can either be aberrations or signs of actual transformation! One such variation was seen in the Indian equity markets in FY2015-16.

    FIIs turned net sellers of Indian equities for the first time since the 2008 financial crisis. Crashing oil prices, sluggishness in China’s economy and expectations of rising bond yields in the USA were enough reasons for hypersensitive FIIs to sell Indian equities worth ~Rs.14,171 crore during the fiscal. Going by the general trend, this should have triggered a sentiment-driven free fall in domestic indices. A 2008-type of market crash was feared. However, we were in for a surprise! A force had countered the selling pressure. Although the indices closed the year in negative, the damage was contained. What was it that softened the blow? We will come to that in some time...

    On a different note, it is fair to state that the government seems committed to the financial inclusion. A multipronged approach has been swiftly implemented for this mission. This approach leverages technology (mobile payments and Aadhar-linked transactions) with well-thought out schemes such as the Pradhan Mantri Jan Dhan Yojna.

    The government’s aim of the financial inclusion drive is to extend financial services to the large unbanked population of the country. While the intentions are all good, there is a glaring omission in the scope of the initiative. It is rather surprising that mutual funds – one of the most regulated, professionally managed and cost-effective investment options, with the potential to deliver high returns over the long term, have been overlooked in the government’s financial inclusion initiative. When one thinks about the possible reasons for this omission, the first thing that comes to mind is ‘risk’ that is associated with such investment.

    Some element of risk is inherent in most investment options and mutual funds aren’t an exception. Risks are unavoidable at large. Also, higher the return expectations, higher are the risks that need to be taken. However, there is a difference between manageable and unmanageable risks. Risks associated with products like mutual funds come under the former category. Mutual funds are well-regulated and professionally managed. SEBI’s stringent regulations that bind the mutual fund industry ensure that investors’ money is not misappropriated. Strict rules on commission disclosure help prevent misselling. Professional fund management gives investors the benefit of informed decisions, while systematic investment mechanism counters the risk of market volatility.

    We have seen advertisements indicate buying a car is the outcome of savings; such ads are not strictly true. Buying a car is an act of consumption and not saving. The investors should know the difference between consumption and savings. Investment in mutual fund is a part of savings which has capacity to generate return over a period of time. Other hand buying a car is purely a consumption activity; it cannot be an investment. However, if the investor’s goal is to buy a car then he/she should invest wisely in financial products that will help reach that goal.

    Therefore wouldn’t it be better if people had the option to seek higher returns by investing in well-regulated financial products like mutual funds, which would in turn help them fulfil their consumption dreams?

    The government is well aware about the suitability of mutual funds for the masses. This is validated by the Employees’ Provident Fund Organisation’s (EPFO) recent foray into the equity markets through mutual funds. Apart from EPF, equity investments also feature in the National Pension Scheme offered by the government. Mr. Bandaru Dattatreya, the Minister of Labour and Employment, has rightly said that “EPFO has invested only in fixed income securities so far, which has given a moderate rate of return. Unless we change the investment philosophy, it would be difficult to give superior returns to subscribers.”

    The change in the government’s philosophy on equity investments, though belated, is highly encouraging. This change needs to be transmitted in order to make mutual funds more accessible to the masses. The resounding success of the Pradhan Mantri Jan Dhan Yojna has given millions of people access to savings and deposits accounts, remittance facility, credit, insurance policies and pension schemes. Let us not deny them the opportunity to invest in mutual funds. Bharat Bill Payment System, the integrated multi-channel payment system launched by the National Payments Corporation of India should support mutual fund investments amongst other utilities and services. Likewise, mutual funds should feature in all payment portals and financial inclusion initiatives. It is also essential that the mutual fund industry gets a level playing field, at par with other financial products. For this, tax discrimination, such as the one seen in the GST Act, should be abolished.

    The force that brought the rare resilience in our equity markets in FY2015-16 is none other than mutual funds. Even as FIIs exited the Indian markets, the net inflow into equity mutual funds hit a record high of ~Rs.75,000 crore, acting as a shock-absorber against the selling pressure. In the early 1990s, retail investors were dominant participants of the Indian equity markets. However, they were pushed to a corner post liberalisation, when foreign institutional investors emerged on the scene. Around the same time, a couple of scams scared away many of the already subdued retail investors. However, it is fair to say that the times have changed. Retail investors are renewing their faith in Indian equities. SEBI’s strict vigilance and control has deterred malpractices. Financial education has empowered investors. A positive transformation is surely underway. The weak link is access. We need to urgently work on making mutual funds more accessible to the masses. Once that is done, we will come closer to achieving sab ka saath, sab ka vikas.


    Disclaimer, Statutory Details & Risk Factors:

    The views expressed here in this article are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

    Mutual fund investments are subject to market risks read all scheme related documents carefully.

    Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

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