Investors in Odisha prefer equity over debt mutual funds: Tata Asset Management

Bhubaneswar: The equity mutual funds have witnessed a net inflow of Rs. 7,625.96 crore in July 2023, according to the Association of Mutual Funds in India (AMFI) data. The same AMFI data suggests within the equity mutual fund category, the small-cap category saw highest inflows of Rs 4,171.44 crore.

Another interesting takeaway from the July AMFI data is the SIP book crossing Rs 15,000 crore mark for the first time ever at Rs 15,245 crore.

As the size of mutual funds (MF) assets grows in India, we find a pattern where a few states continue to prefer equity MF schemes over non- equity schemes. Investors in Orissa for example have shown an inclination for equity mutual funds over non-equity MFs. As of July 2023, almost 70% of the investments from the state of Orissa are parked in Equity schemes. Investors in Orissa have parked almost Rs.  43,400 crore in mutual funds.

Tata Mutual Fund also sees a similar trend in Orissa, where Tata Mutual Fund investors have shown preference for equity mutual fund schemes. For Tata Mutual Fund, almost 53% of AUM comes from equity schemes, 35% from debt & liquid schemes and 12% from balanced schemes in Orissa according to July AMFI data.

There seems to be a lot of interest shown in the equity category, amongst the investors in sectoral funds such as Tata Digital India Fund which is an open-ended equity scheme that invests in Information Technology sector and Tata India Pharma & Healthcare Fund which is an open ended equity scheme that invests in pharmaceutical and healthcare sector.

It may be noted here that the Tata Digital India Fund and Tata India Pharma & Healthcare Fund fall under very high-risk category as both the funds fall under the category of the sectoral funds. We also feel that the investors are now inclined in the Focused Funds as a category.

According to Meeta Shetty (CFA), Fund Manager, Tata Asset Management, “At Tata Asset Management, our focus is on the investment process and disciplined approach to investing. We adopt the GARP (Growth at Reasonable Price) approach to investing across our MF schemes including sectoral funds and focused funds. The GARP approach allows us to bet on high quality shares and at the same time ensures that the quality shares are bought at reasonable price. We believe there are multiple opportunities at this point of time in the broad markets which can see strong growth as well as re-rating and we are trying to capture them in our Tata Focused Equity Fund. Focused fund being a limited stock portfolio (30 stocks) leads to slightly higher concentration by design, this helps us in improving the performance. We manage it via both top down as well as bottom-up approach. IT and the Pharma sector have also gone through course correction. Growth for the IT sector is almost at its decadal lows and we expect it to bounce back in the near to medium term. For the pharma sector, growth has finally shown some revival after a long challenging phase since 2015.  We observe that both these sectors are trading closer to its long-term average.”