Rajasthan investors prefer equity category funds: Tata Asset Management

Rajasthan | September 22, 2023: The equity mutual funds have witnessed a net inflow of Rs.20, 245.26 crore in August 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 inflows of Rs 4,264.82 crore while sectoral/thematic funds saw inflows of Rs 4,805.81 crore and multi-cap category witnessed Rs 3,422.14 crore inflows. Overall, the mutual fund industry in India reported total assets under management (AUM) of Rs 46.63 lakh crore i.e. including the close-ended schemes as per the August AMFI data.

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 Rajasthan for example have shown an inclination for equity mutual funds over non-equity. According to the august AMFI data, almost  71% of the investments from the state of Rajasthan are parked in Equity schemes while 21% is parked in debt & liquid schemes and 6% in balanced funds. Investors in Rajasthan have parked almost Rs.83,029.01 crore in mutual funds.

Tata Mutual Fund also sees a similar trend in Rajasthan, where Tata Mutual Fund investors have shown preference for equity mutual fund schemes. For Tata Mutual fund, almost 57% of AUM comes from equity schemes, 34% from debt & liquid schemes and 9% from balanced schemes in Rajasthan according to August AMFI data.

Within the equity category, investors have shown inclination towards infrastructure funds such as Tata Infrastructure Fund which is an open-ended equity scheme that invests in infrastructure sector.

It may be noted here that the Tata Infrastructure Fund falls under very high-risk category.

According to Abhinav Sharma, Fund Manager, Tata Asset Management, “At Tata Asset Management, our focus is on the investment process and disciplined approach to investing. We adopt the Growth at Reasonable Price (GARP) approach to investing across our MF schemes including sectoral 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 Infrastructure Fund. Tata Infrastructure Fund has positions across sectors like capital goods and engineering, cement, power utilities, logistics and residential real estate which are set to benefit immensely from capex cycle upturn and longer-term trends like decarbonisation, self-reliance and China plus 1. In our view, our portfolio is well balanced and is a good mix of quality companies (high and sustainable growth potential) and rerating candidates (cheaper valuation with upside triggers).”