India to regain investor interest in equity mutual funds in 2012: ICRA

The year 2012 could see the return of interest in equity funds in India as markets respond positively to policy actions, says ICRA Online.

The funds can also benefit from gradual improvement in confidence due to policy actions aimed to mitigate concerns emerging out of the Euro zone debt crisis. Expected easing of monetary policy in other emerging
markets is also expected to add to the positive sentiments.

ICRA, a leading information services and data solutions provider in the financial services sector in India,  could also see more wealth management firms taking the MF route to ensure the PMS money stay with them as the regulator has hiked the minimum investment amounts for PMS.

"Debt funds could witness enhanced interest due to expectation of rate cuts over the short term, which will result in better risk-adjusted returns. The tight government fiscals could, however, limit the upside over the short term. There is a distinct possibility of fixed maturity plans also remaining attractive in the short term," says Icra.

It added that the recent ruling of reducing the marked-to-market window from 90 days to 60 days and that all securities in the liquid schemes be valued could ensure that investors with a longer-term investment horizon stand to benefit.

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