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Sundaram MF: Investors confident equities will deliver in the long-term despite slowdown

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Mutual Fund (MF) inflows in August have risen by more than 12 percent. While the inflows into large and small cap funds have seen healthy growth, midcap funds have seen a contraction. Sunil Subramaniam, managing director and CEO, Sundaram Mutual Fund in an interview with CNBC-TV18 talked about market outlook.

Mutual Fund (MF) inflows in August have risen by more than 12 percent. While the inflows into large and small cap funds have seen healthy growth, midcap funds have seen a contraction. Sunil Subramaniam, managing director and CEO, Sundaram Mutual Fund in an interview with CNBC-TV18 talked about market outlook.
“While some long-term midcap and smallcap systematic investment plans (SIPs) have turned negative and there is this feeling that economic slowdown is on the anvil, I think from an asset allocation perspective, investors are still reasonably confident that equities will deliver over the long-term,” Subramaniam said.
“Existing investors who have already invested are experiencing the pain of the stock market and are not reacting negatively to it,” he added.
Sundaram said that even the alternative sources of investment are losing attraction.
“Every day there is news about banks cutting interest rates, not just on lending but on deposit rates too. So the alternative sources of investments are also becoming less attractive. So equities as an asset class, people are now beginning to realise that it is steady, consistent and the SIP flows bear that out,” said Subramaniam.
He added: “There are institutional investors, there are high net worth individuals (HNIs) and there are retail investors. Reasonably bad experiences they have had with the credit funds and with exposures to names like Zee, DHFL and the likes, retail investors have got a little bit wary of this segment.
"HNIs are also still being wary of credit funds. However, they believe that with the slowdown in the economy and interest rates trending down, there is some money to be made in terms of duration play. Institutional investors are at the short-term end of the market and with the new regulations around the money market, they are shifting to arbitrage.”
Subramaniam said that arbitrage funds are seeing good institutional inflows.
“On the equity side, arbitrage funds have seen big inflows over the last few months. That is institutional money, which is playing the taxation game,” said Subramaniam.

Market Movers

CompanyPriceChange%Gain
Adani Ports694.35 47.45 7.33
Bajaj Auto4,167.10 113.20 2.79
HUL2,482.90 65.20 2.70
Bharti Airtel538.75 10.10 1.91
Grasim1,480.75 22.55 1.55
CompanyPriceChange%Gain
HUL2,480.75 63.85 2.64
Bajaj Auto4,164.95 105.95 2.61
Bharti Airtel538.90 10.20 1.93
Bajaj Finserv11,998.00 179.95 1.52
IndusInd Bank994.90 10.65 1.08
CompanyPriceChange%Gain
Adani Ports694.35 47.45
Bajaj Auto4,167.10 113.20
HUL2,482.90 65.20
Bharti Airtel538.75 10.10
Grasim1,480.75 22.55
CompanyPriceChange%Gain
HUL2,480.75 63.85
Bajaj Auto4,164.95 105.95
Bharti Airtel538.90 10.20
Bajaj Finserv11,998.00 179.95
IndusInd Bank994.90 10.65

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Euro-Rupee87.8770-0.4200-0.48
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Rupee-100 Yen0.6699-0.0019-0.29