ARE FUND MANAGERS TURNING CAUTIOUS?
If flows have stayed high regardless of where valuations are, are fund managers preparing for a soft landing by increasing cash holdings or buying protection using derivatives? For Indian equity fund managers, this is a strange sound. “A fund manager has to assume investors have made their asset allocation decisions and want us to manage their equity exposure. If an investor has allocated only a small proportion to equity and finds that we are dithering from taking equity exposure in our equity funds, it doesn’t serve his purpose,” says a fund manager. So, it isn’t surprising that all equity funds put together have kept cash levels at between 4-5% of assets in the past six months, according to data from Value Research.
There have been attempts to launch products that make the asset allocation decision