A recent study reveals that fund managers have a bearish outlook for the equity market over the next three months. But most of them would rather retain their existing portfolio and not make any changes to their exposure to equities
A recent survey has revealed that fund managers have a cautious view of both the equity and debt markets. A majority of the fund managers (among 16 Asset Management Companies, or AMCs) who took the latest survey conducted by ICICI Securities in May consider the Indian equity market to be "fairly valued".
By the end of the year, most of these managers surveyed expect the Sensex to be in the range of 17,500-21,500, according to the survey. But for the next three months, the fund heads have taken a neutral to bearish view of the overall market, due to growing concerns over high crude oil prices and possible continuing monetary tightening by the apex bank.
With this current outlook of the market, most of the fund managers say that they prefer to maintain their current asset allocation and prefer not to make any changes in their equity exposure.
More than 60% of the fund managers, from the 16 AMCs that were surveyed, believe that mid-caps would be a better investment option than large-caps, over a one-year period.
With regard to earnings growth, these fund managers have a moderate view. But, contrary to market expectations, 44% of the fund managers believe that earnings would be in the range of 10%-15% for the year 2011-12. For the following financial year 2012-13, 62% of the managers expect earnings growth to above 15%.
A major fear factor for most of the fund managers is the high level of crude oil prices. Compared to other global risks for the Indian equity market, high crude oil prices peak at 88% as a factor for concern, whereas other factors like the European Union debt crisis and the Chinese slowdown just account for 13% each as causes for concern.
When told to rank their most preferred sector, pharma led the pack followed by IT and BFSI (Banking, Financial Services and Insurance). The saturated telecom sector and the cement industry were at the last of the list. Despite the fact that the Reserve Bank of India might allow new banking licences, fund managers were bullish on private sector banks.
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I'm intrigued by wise opinion of great fund managers.They were bloating in praise of ELSS saying "Now fund managers can perform better with long term investment strategy as they will not be disturbed by frequent redemption pressure built by investors".Any one can see & judge the performance of ELSS Funds.Wake uo "Mutual Fund Insight".You top the list of biggest misguidance provider.In last eight years long term increased from one year to three years and then moved to five years and shortly 10 years will be flaunted.I'm sure MFs will come a cropper in 10 yrs category too.Look at Morgan Stanley Growth Fund with it's 15 years history,whose Fund Manager must be pocketing one of the highest salary in the industry..The mistakes commited in 2007-8 were repeated in 2010-11.Wise men learn from mistakes & that is called 'expe rience'.Repeating the same mistake again &again is virtue of fools..It is high time that working of MFs is thoroughly investigated.Are our Dund Managers in habit of purchasing equity when price is high & selling them when price is low.How come hardly any NFO is launched when market is in slump..In a high market there appear so many NFOs.SEBI are you sleeping?