npavan78
02-07-2008, 07:26 AM
"Hope is the only universal liar who never loses his reputation for veracity," goes the adage. And now placing faith in the universal liar are mutual funds in India. Weak macro-economic fundamentals and low investor confidence due to bearish market conditions are not deterring fund houses from launching more equity funds.
Contrary to popular belief, almost all fund houses are creating blueprints for equity funds that would be different in style, substance and investment rationale. The idea is to attract investors who are willing to participate at low-market levels. The most pertinent question, however, is, Will these funds be able to collect money in times of bad market and extreme volatility.
"I think, investors will be a bit uneasy investing in equity funds; the trend now, for sure, is skewed towards debt schemes," said ICICI Prudential CIO Nilesh Shah, adding, "Everything depends on oil prices. If crude prices come down, the market sentiment will be better and equity funds would be in vogue again."
However, UTI AMC vice-president and fund manager Harsha Upadhyaya believes that periods of high volatility are excellent to gradually build a portfolio of one’s choice at reasonable valuations. "Volatility is inherent to the equity market. However, volatility also expands the universe of attractive investment opportunities for long-term investors," he added.
Contrary to popular belief, almost all fund houses are creating blueprints for equity funds that would be different in style, substance and investment rationale. The idea is to attract investors who are willing to participate at low-market levels. The most pertinent question, however, is, Will these funds be able to collect money in times of bad market and extreme volatility.
"I think, investors will be a bit uneasy investing in equity funds; the trend now, for sure, is skewed towards debt schemes," said ICICI Prudential CIO Nilesh Shah, adding, "Everything depends on oil prices. If crude prices come down, the market sentiment will be better and equity funds would be in vogue again."
However, UTI AMC vice-president and fund manager Harsha Upadhyaya believes that periods of high volatility are excellent to gradually build a portfolio of one’s choice at reasonable valuations. "Volatility is inherent to the equity market. However, volatility also expands the universe of attractive investment opportunities for long-term investors," he added.