SBI Mutual Fund, a major beneficiary of the influx of individual investors in India's capital markets, now sees more than half of its SIPs coming from small towns and cities.
Close to a third of the fund house's retail business comes from “B30”— beyond the 30 largest cities in India, SBI Mutual Fund's Deputy Managing Director DP Singh told BQ Prime. The investments from these regions, according to Singh, are very steady and show little churn for India's largest asset manager.
SIPs into Indian mutual fund schemes have remained resilient in the face of recent market volatility, staying above Rs 12,000 crore for the fourth consecutive month in August, according to data from the Association of Mutual Funds in India.
Still, equity fund managers have had in beating benchmark returns in the large-cap space. Singh said there is a use case for actively managed funds and that the best strategy is to use these in conjunction with passive schemes.
SBI Mutual Fund's actively managed mid- and small-cap schemes have managed to beat the benchmark index, as well as its peers, over the last year as well as over five years on an annualised basis, according to data by Morningstar Inc.
On the fixed income side too, Singh said that a combination of active and passive funds is the best strategy. SBI Mutual Fund expects bond yields to peak very soon and suggests locking in funds at current yields for longer periods.
Watch the full interview here:
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