Mutual fund house Fidelity International India today said domestic fixed income investors are increasingly going in for short-term products and keep shuffling from one fund to another, besides preferring individual stocks over industry segments.
"The fixed income products, especially those in the short-term cash segment, are growing at a faster pace now, as investors are looking for more stable income and expect positive returns in all market conditions besides keen on preserving their hard-earned capital," Fidelity International India Country Head Ashu Suyash.
Investors are also willing to consider investing in multiple asset classes, she added.
According to Suyash, of the Rs 7-trillion MF industry, Rs 5.65 trillion are fixed income-based funds while the rest Rs 1.35 trillion are equity-based. Over the past few quarters, investors have been flocking to fixed income funds.
On the problems faced by the MF industry, which has been reeling under a wave of regulatory interventions since a year, she said though fixed income funds look to be more promising now, for this market to bloom, a developed corporate bond market, coupled with FII participation, is a must.
"The predominance of bank funding and government bonds are impeding growth of this market segment in particular and overall domestic MF industry in general. Dominance of these factors make credit risk distribution skewed."
Fidelity International Global Investment Officer for fixed income segment Andrew Wells said Asian investors are also moving into to park their money with fixed income asset classes as they are on the look out for regular income and higher yields.
Source: http://www.indianexpress.com/story-print/764462/
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