Index Funds are in Demand!
Ninad RamdasiCategories: DSIJ_Magazine_Web, DSIJMagazine_App, Editorial, MF - Editorial, Mutual Fund
The year 2022 ended on a positive note for equity investors while the key benchmark indices closed in the green for seven years in a row.
The year 2022 ended on a positive note for equity investors while the key benchmark indices closed in the green for seven years in a row. Despite positive returns in 2022, leading to the longest favourable return run in the history of the equity markets, we saw that investors have shown an increased preference for index funds in the year gone by. As per AMFI data the AUM of index funds that include both debt and equity schemes more than doubled to Rs 1.18 lakh crore from Rs 42,880 crore a year back. Usually, with markets performing well investors plan to generate alpha. The preference for passive funds can also be attributed to the inability of several mutual funds to beat the benchmark returns. It will be interesting to see if the demand for index funds improves in 2023.
Our cover story in this issue focuses on the movers and the shakers of 2022. It is an interesting narrative it is and helps readers understand which category of mutual funds have outperformed in 2022 and which ones have been laggards. In 2022 Gold outperformed Nifty returns. Will 2023 be the same? Our special story in this issue focuses on precious metals and can help you construct your portfolio after considering the positive outlook on precious metals.
The mutual fund industry has something to cheer about this month as SEBI has now allowed the foreign portfolio investors (FPIs) operating from International Finance Service Centres (IFSCs) and regulated by International Financial Services Centres Authority (IFSCA) to invest in all mutual fund schemes other than thematic funds. The SEBI has further granted permission to AMCs to provide management and advisory services to such FPIs.
Yogesh Supekar
Executive Editor