ARE FUND MAN­AGERS TURN­ING CAU­TIOUS?

Mint ST - - CORPORATE -

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

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