Some Equity Mutual Fund NAVs Jumped 8.3% In A Day!
With finance minister announcing a sharp cut in corporate taxes, which hit the Indian stock market to its best day in a decade. As of the result, equity mutual funds also saw a phenomenal rise in its net asset values. Most of the equity mutual fund NAVs raised to 8.31%. Mutual fund investors are delighted the bull run in the stock market.
The Market benchmark S&P BSE Sensex has gained 1,100 points on Monday. In two days, the bellwether gained over three thousand points.
As of 20th September, Kotak Standard Multicap Fund saw a change in its NAVs raised of 5.56% in just one day. An open-ended equity fund schemes, nine of the best 10 schemes are either banking funds or Exchange-Traded Funds (ETFs).
Equity Mutual Fund NAVs
Reliance ETF Bank BeES is in the first place with 8.31 percent. The second place held by SBI ETF Nifty Fund and Kotak Banking ETF NAVs jumped each with 8.31 percent. Edelweiss Exchange Traded Fund Nifty Bank and ICICI Prudential Bank ETF are in 3rd place with 8.3% gains.
SBI ETF Nifty 50 fund net asset values increased by about 5.32 percent in one day.
BSE Bankex rose around 8.5 percent on Friday itself from the levels of 30,100. The index has been on a rising spree since morning. On Monday, the index has grown to 34,340 level. The benchmark indices BSE Sensex rose 1,725 points in the Friday session.
According to the reports, the finance minister has proposed to reduce corporate tax rate from 30 percent to 22 percent. FM stated 15% for new manufacturing companies which set up on or after 1st October 2019.
Mutual fund advisors believe investors will find some more time to cheer as the investors would be covering their short positions before Thursday this week.
The fund managers and investment advisors felt that there are around 65000 contracts on short positions, which investors will cover before this Thursday. Therefore, they can see more rally this week.
A certified expert says, once the markets normalize, they might see some nominal losses next week. Equity Fund investors have not been received great returns from the last 10 years. But, after the finance minister’s announcement, everything works as intended, the economic changes will help equities.
According to the reports, mutual fund investment advisors believe that sentiment in the market will change after this major economic reform. However, they taught that they could not away from this rally and should continue with their long term investments as planned.
The government has delivered one of the biggest structural reforms. According to the reports, Stock markets react to the reform of corporate tax rate cuts. They realize that the reform will take some time to implement its attributes and obtain its result. As of result, equity investors will get the benefit. Equity investors should keep their investments and stick to desired asset allocation. Systematic Investment Plan (SIP) is the best way to invest in assets, says JS Financial Advisor.
Fund Advisors believe that Small-cap and Mid-cap funds which were witness loses from the past 18 months have the potential to benefit from the economic recovery. “At this point, investors want to make a strategic move, they may seem to increase their allocation. Investors will also invest in mid and small-cap funds, ” says Chokkalingam.