In the current market conditions, IFAs feel it as a good investment product
Along with long term FMPS; AMCs are busy offering capital protection funds to draw investors towards investment in the volatile market conditions. These funds aim to provide capital appreciation linked to equity market with downside protection at the end of tenure.
Three AMCs - Birla Sunlife, Sundaram and Axis are either in a queue to launch capital protection NFO or busy closing one.
Axis Mutual Fund has been in this space for last five months and is witnessing a good response to their products. “Capital protection funds give the investor a blend of equity and fixed income. We have been getting good response to our NFOs. In fact, we collected about Rs 160 crore in our second series of capital protection fund,” said Karan Dutta, National Sales Head, Axis Mutual Fund.
Sundaram Mutual Fund has filed three offer documents with SEBI to launch capital protection fund and Birla Sunlife MF recently launched an NFO.
In current market conditions where IFAs find it difficult to convince investors to make fresh investment, hybrid products present a good opportunity. “These funds give investors a mix of equity and debt both which is a win-win situation for investors. Since most investors today are scared to invest in the equity market, these funds seem to provide a better option,” said H K Chugh, IFA.
IFAs are reporting a decent response to these funds. “We have seen lump-sum investment in these funds as investors do not want to miss out on the opportunity to have exposure in the equity market along with debt,” said, Dipak Kumar Jha, IFA.
Mukesh Dedhia, Director, Ghalla Bhansali group of Companies sums it up best. “Different investors have different needs. These funds are a good investment option a certain segment which wants to have a small exposure to equity and more in debt,” said Mukesh.
