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September panic selloff: Mutual fund houses give their outlook

September panic selloff: Mutual fund houses give their outlook

September panic selloff: Mutual fund houses give their outlook
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By CNBC-TV18 Oct 26, 2018 12:26:19 PM IST (Published)

Equity mutual funds, including equity linked savings scheme (ELSS) gained a net inflow of Rs 11,172 crore as compared to Rs 8,375 crore in August 2018, according to Association of Mutual Funds of India (AMFI).

Equity mutual funds, including equity linked savings scheme (ELSS) gained a net inflow of Rs 11,172 crore as compared to Rs 8,375 crore in August 2018, according to Association of Mutual Funds of India (AMFI).

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According to Investopedia, a mutual fund is an investment vehicle made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and other assets.
According to Prabhudas Lilladher, here's what mutual fund houses have to say:
HDFC Mutual Fund Outlook:
Total equity assets managed: Rs 1,29,009 crore
Amid the rising crude oil prices, depreciating rupee, moderation in equity oriented mutual funds flows and delays in NPA (non-performing assets) resolution under National Company Law Tribunal (NCLT), HDFC Mutual Fund said there will be key risks in the near term.
A lower rupee impacts sectors such as IT, pharma, metals, oil and gas while banks and utilities are not much impacted. FMCG sector, however, is impacted positively, as a lower rupee triggers higher inflation resulting in higher consumer prices, the fund house said.
“The opportunity created by correction in Indian market should be used by discerning investors to increase allocation to equities, especially in multi cap/ large cap funds in a phased manner," HDFC Mutual Fund advised.
According to the fund house, Dabur India Ltd, Hindustan Petroleum Corporation Ltd, Prestige Estate Projects Ltd, Bajaj Corp Ltd among others were the top stocks bought across the large cap, mid cap and small cap market segments.
While Nestle India Ltd, Bajaj Auto Ltd, Mahindra & Mahindra Financial Services Ltd, Cochin Shipyard Ltd, Bharat Dynamics Ltd were among the top stocks sold.
Reliance Mutual Fund Outlook
Total equity assets managed: Rs 85,827 crore
Reiterating what HDFC Mutual Fund said, Reliance added that the higher crude oil prices and a lower rupee added pressure on Indian market in the past month and is expected to persist in the short-term. The volatility continues to add pressure on mid cap stocks.
A depreciating currency will have a positive impact from an earnings perspective as companies which import to international markets are likely to benefit, the fund house said.
The upcoming general elections in 2019 will create volatility, however, earnings will take over the short-term volatility, the report added.
"Investors should position their portfolios towards large cap and multi cap funds with a focus on adequate asset allocation. Large caps have significant inbuilt capacity utilisation left and the operating leverage that can still be utilised. Also, the fact that large caps operate in the defensive space will help investors deal with market volatility,” the fund house advised.
Piramal Enterprises Ltd, Exide Industries Ltd, JM Financial Ltd, Equitas Holdings Ltd, Fortis Healthcare Ltd were among the top stocks bought across the three market cap segment.
While Indiabulls Housing Finance Ltd, Bajaj Auto Ltd, Jindal Steel & Power Ltd, SpiceJet Ltd were among the top stocks sold.
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