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Focused <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword>, which invest in a concentrated portfolio of <keyword id="19905382" type="General" weightage="20" keywordseo="stocks" source="keywords">stocks</keyword>, are gaining traction among investors with the <keyword id="22748135" type="General" weightage="20" keywordseo="asset-base" source="keywords">asset base</keyword> of the category growing to Rs 1.43 lakh crore in three months ended June 2024, marking an increase of 31% from a year ago. Interestingly, some of the focused funds offered by the mutual fund houses such as <keyword id="22748136" type="General" weightage="20" keywordseo="Invesco-India-Focused-Fund" source="keywords" meta.keywordsubtype="org" meta.entityname="Invesco India Focused Fund" meta.hostid="261" meta.entityid="Invesco India Focused Fund">Invesco India Focused Fund</keyword>, Mahindra Manulife Focused Fund, JM Focused Fund, and <keyword id="19896378" type="General" weightage="20" keywordseo="hdfc" source="keywords">HDFC</keyword> Focused 30 Fund delivered a remarkable return of 40-60% in the past year, industry data showed. Focused funds are a type of mutual fund where the fund manager selects a concentrated portfolio of stocks, typically limited to a maximum of 30 due to regulatory constraints. This requires the fund manager to be highly skilled in stock selection, as they need to identify the best investment opportunities across the market without bias toward any specific market cap or sector. According to data from the <keyword id="20090034" type="General" weightage="20" keywordseo="association-of-mutual-funds" source="keywords">Association of Mutual Funds</keyword> in India (Amfi), the assets under management (AUM) of the focused funds were at Rs 1.43 lakh crore in the June quarter 2024-25 as compared to Rs 1.09 lakh crore in April-June FY24. This growth highlights the appeal of focused funds as an alternative to portfolio management services (<keyword id="19950020" type="General" weightage="20" keywordseo="pms" source="keywords">PMS</keyword>), especially with recent tax changes that make PMS less attractive due to higher costs and tax implications, Feroze Azeez, Deputy CEO, of Anand Rathi Wealth Ltd, said. "With the increase in taxation on both small-term capital gain tax and long-term capital gain tax, PMS portfolios are expected to see a drop in post-tax returns. For example, a PMS portfolio generating a pre-tax return of 14 % could see post-tax returns drop from 11.73 % to 11.29 %. This shift could lead to fund managers churning portfolios less frequently, which in turn will be affecting returns for investors," he added. Focused funds follow a similar concentrated portfolio strategy where the fund manager picks the top stocks and offers flexibility across market caps. Thus, becoming a more attractive option for investors looking to optimize their returns. Industry experts recommend investing in focused funds through systematic investment plans (SIPs) as a smart strategy in the current market environment of sector rotation and high valuations. Since these funds invest in a small number of stocks, SIPs can help reduce risk by spreading out investments over time. Overall, there are 31 focused schemes offered by different mutual fund houses in the category. These schemes have given returns of 19-60% in the last one year. In terms of returns, smaller funds have performed exceptionally well. The Invesco India Focused Fund delivered a remarkable return of over 60% in the past year, while Mahindra Manulife Focused Fund provided around 50% returns and JM Focused Fund offered a return of 45% during the period. With a corpus of Rs 1,552 crore as of June 2024, Mahindra Manulife Focused Fund has consistently performed well, securing the second rank for 1, 2, and 3-year periods. The fund delivered returns of 50%, 32%, and 26% over these periods, respectively. HDFC Focused 30 Fund achieved the top rank over the 3 years with a return of 28.63 %, while JM Focused Fund secured the third rank with a 25 % return during the same period. "The success of focused funds underscores the importance of skilled fund management and strategic stock selection," an industry expert said. Focused funds opt for a more targeted strategy rather than the broad diversification typical of traditional mutual funds. This approach helps fund managers make investments in a carefully selected group of stocks, reflecting their strongest investment beliefs. The concentrated nature of these portfolios requires careful selection of each stock, as the fund's performance heavily depends on these choices. Although these funds hold a limited number of stocks, they are structured to be sufficiently diversified to effectively manage risk. Overall, the assets of the equity mutual funds rose to Rs 27.6 lakh crore in June 2024 from Rs 17.43 lakh crore in June 2023.

Focused MFs' asset base rises 31% to Rs 1.43 lakh cr in June qtr; up to 60% returns last year

<ul><li>Three banks would be most impacted by the move as their capital ratios would be affected by 30-85 basis points.</li><li>Capital buffers will have to be further strengthened by banks if they want to lend to consumers for unsecured loans.</li><li>Borrowers with more than five personal loans rose from 1% in 2018 to 7.7% in March 2023, as per a report.</li></ul> Shares of <keyword id="116253" type="General" weightage="50" keywordseo="sbi-cards" source="Orion">SBI Cards</keyword>, RBL Bank, <keyword id="6357149" type="General" weightage="50" keywordseo="hdfc-bank" source="Orion">HDFC Bank</keyword> and <keyword id="6653" type="General" weightage="50" keywordseo="icici-bank" source="Orion">ICICI Bank</keyword> are expected to come under pressure after the Reserve Bank of India asked lenders on Thursday to set aside more capital for consumer loans. This move is expected to impact the capital buffers of these banks. According to analysts, these banks would be most impacted by the move as their capital ratios would be affected by 30-85 basis points. For banks the first line of defense against bad loans is CET Tier 1 capital or Common Equity Tier 1 capital (CET1), which is the highest quality of regulatory capital, as it absorbs losses immediately when they occur. According to Motilal Oswal Financial Services, the CET 1 impact would be maximum for RBL/HDFC Bank/ICICI Bank at 84 basis points/72 basis points/64 basis points. Among non banks, SBI Cards would be the most vulnerable with a 416bp impact on capital ratios. Capital buffers will have to be further strengthened by banks if they want to lend to consumers for unsecured loans. If a bank had to set aside say ₹20 for loans, it will now have to set aside 25% more for every unsecured loan it issues. Not just this the banks will have to set aside more capital if they want to lend to shadow banks or non banking financial institutions as well. When cost of capital increases, so will lending rates. In the years after the pandemic broke, unsecured personal loans to retail borrowers have been on a steady rise. Not just banks but even non banks have been merrily issuing such loans to borrowers, and in many cases these borrowers have multiple such loans used for consumption. From 12-14% these loans are now growing at 30% rate. The central bank has cracked down on some non banks for not adhering to norms while underwriting such small ticket loans. The red flags have been flying high for a while now. According to proprietary research done by UBS, borrowers with more than five personal loans rose from 1% in 2018 to 7.7% in March 2023. New disbursement of personal loans to borrowers with weaker credit profiles accounted for 22% of disbursements. Of all banks, UBS was of the view that state-owned banks and non banking financial companies had a much higher share of weak borrowers compared to private banks. Analysts believe that pressure on net interest margins and higher credit costs to impact earnings of banks and shadow banks over FY24 and FY25. Paytm, a fintech company, has recently built a large loan portfolio which is mostly comprised of personal loans. With the <keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword> cracking down on these loans, the loan growth will be impacted for Paytm too. Deepak Shenoy, CEO of Capital Mind, took to social media to explain the impact, “See how it affects SBI cards: SBI Cards had credit card receivables of ₹ 45,000 crore with 23% capital adequacy ratio (CAR). So ₹10,500 cr in capital (23% of ₹45Kcr). Increase risk weight to 125% means ₹45K cr=₹56K cr risk weighted assets.” Shenoy explains that if “SBI Cards wants to grow, and keep high CARs (min is 15% I think?) they’ll need to raise capital and dilute. Which means for the same profit = higher capital. Means lower ROEs.” ALSO READ: <a href="https://www.businessinsider.in/stock-market/markets/news/foreign-investors-continue-to-bet-big-on-banks-and-nibbling-on-small-and-mid-cap-stocks/articleshow/104462273.cms" data-type="tilCustomLink" target="_blank">Borrowers with multiple personal loans a big risk to profitability of banks and NBFCs</a>

RBI tightens norms on personal loans for banks and NBFCs; stocks to be under pressure

<keyword id="472962" type="General" weightage="20" keywordseo="hdfc-life" source="Orion">HDFC Life</keyword>, one of India's leading insurers has collaborated with renowned cricketer, <keyword id="3142448" type="General" weightage="100" keywordseo="rishabh-pant" source="Orion">Rishabh Pant</keyword> to create a compelling campaign aimed at driving the need for term insurance. The objective of the campaign is to encourage individuals to financially secure their loved ones against unforeseen circumstances. The campaign serves as a powerful reminder of the fact that life is unpredictable and seldom gives second chances. This makes it necessary for one to prepare beforehand to enable their loved ones bounce back from any challenge that life throws their way. The film showcases the real-life story of Rishabh Pant and his journey of realisation. Through the film we see glimpses of his numerous accomplishments, moments of happiness and the experience that taught him the biggest lesson of his life. Speaking about his association with the campaign, Rishabh Pant said, "I am happy to be associated with HDFC Life for this campaign. Life is unpredictable, and HDFC Life has been at the forefront of encouraging people to financially secure themselves and their families against life's uncertainties. <keyword id="6406875" type="General" weightage="20" keywordseo="life-insurance" source="Orion">Life insurance</keyword> is a financial product that not only acts as a safety net but also enables us to continue the journey ahead with a sense of pride." Vishal Subharwal, Chief Marketing Officer and Group Head - Strategy, HDFC Life added, "The film captures the true essence of life while bringing the spotlight on the core benefit of term life insurance. We hope that the powerful real-life story of Rishabh Pant, a role model for many and a world-class athlete, serves as a pertinent example to make one realise the uncertainties of life and the need for financial protection. Most Indian households find it hard to sustain their living standards in the absence of adequate life insurance cover. We sincerely hope that this campaign will educate and inspire more individuals to secure their families with Term Insurance." Rajdeepak Das, CEO &amp; Chief Creative Officer, <keyword id="131262" type="General" weightage="20" keywordseo="leo-burnett" source="Orion">Leo Burnett</keyword>, South Asia said, "The pandemic has left us with a false sense of invincibility. With this campaign we wanted to reiterate that not everyone gets a second chance at life. The biggest mistake we can make is to not learn from our mistakes and to bring home the message of unpredictability. We drew inspiration from the real-life incident of cricketer Rishabh Pant where he survived a near-fatal road accident. Our campaign breaks the illusion of invincibility and reiterates the importance of financial planning." The campaign will be available across multi-media platforms - Television, Digital, Print, and Outdoor.

Rishabh Pant stars in HDFC Life's latest campaign on term insurance

<ul><li><keyword id="3117450" type="General" weightage="20" keywordseo="HDFC-Capital" source="Orion">HDFC Capital</keyword> has raised $376 million under the second scheme of <keyword id="16012698" type="General" weightage="20" keywordseo="HDFC-Capital-Affordable-Real-Estate-Fund-3" source="Orion">HDFC Capital Affordable Real Estate Fund -3</keyword> (<keyword id="15003778" type="General" weightage="20" keywordseo="H-CARE-3" source="Orion">H-CARE 3</keyword>).</li><li>H-CARE 3 is a <keyword id="16012699" type="General" weightage="20" keywordseo="category-II-alternative-investment-fund" source="Orion">category II alternative investment fund</keyword> (AIF) that focuses on providing long-term investment in affordable and mid-income housing projects.</li><li>In addition, the real estate private equity arm of HDFC Group will also invest in technology companies engaged in the affordable housing ecosystem.</li><li>Abu Dhabi Investment Authority (ADIA), through a wholly-owned subsidiary, is the primary investor in H-CARE 3 schemes 1 and 2.</li></ul> HDFC Capital, a subsidiary of top mortgage lender Housing Development Finance Corporation, has raised $376 million under the second scheme of HDFC Capital Affordable Real Estate Fund -3 (H-CARE 3). H-CARE 3 is a category II alternative investment fund (AIF) that focuses on providing long-term, flexible funding across the lifecycle of affordable and mid-income housing projects, including early-stage funding. HDFC Capital is the investment manager to HDFC Capital Affordable Real Estate Fund 1 (H-CARE 1), HDFC Capital Affordable Real Estate Fund 2 (H-CARE 2) and HDFC Capital Affordable Real Estate Fund 3 (H-CARE 3). All these funds combine to create a $ 3.1 billion platform targeting the development of affordable and mid-income housing in India. Abu Dhabi Investment Authority (ADIA), through a wholly-owned subsidiary, is the primary investor in H-CARE 3 schemes 1 and 2. “Despite the recent headwinds in the global macro landscape, I continue to be optimistic about the demand for homes in India. As the pivot of global growth shifts, India is envisaged to remain amongst the fastest growing major economies,” said Deepak Parekh, chairman, HDFC. “And housing will play an even more important role as a catalyst for growth. HDFC Capital has been one of the pioneers of investing in affordable and mid-income housing projects in India.” Parekh further added that, “With the support of leading global investors like ADIA and partnerships with trusted developers, the HDFC Capital platform is well on its way to achieve its medium-term goal of funding one million affordable homes in India.” In addition, the real estate private equity arm of HDFC Group will also invest in technology companies (construction technology, fin-tech, sustainability-tech etc.) engaged in the affordable housing ecosystem, the company said. “At HDFC Capital, our vision is to finance the development of the affordable housing ecosystem in India and provide a seamless platform for all stakeholders including global investors, developers, and vendors to access financing and technology innovations to develop sustainable and smart affordable homes,” said Vipul Roongta, MD &amp; CEO at HDFC Capital. HDFC Capital’s target is to finance the development of one million affordable homes in India through a combination of innovative financing, partnerships and technology, whilst focusing on sustainability. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/indias-credit-worthiness-to-be-stable-in-2023-but-upcoming-elections-could-keep-social-spending-elevated-moodys/articleshow/96851926.cms">India’s credit worthiness to be stable in 2023, but upcoming elections could keep social spending elevated: Moody’s</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/news/gautam-adani-aap-ki-adalat-interview-dhirubhai-ambani-is-my-role-model-mukesh-ambani-a-very-good-friend/articleshow/96828407.cms">Dhirubhai Ambani is my role model and Mukesh Ambani a very good friend, says Gautam Adani</a>

HDFC Capital raises $376 million under alternative investment fund for affordable housing; ADIA is primary investor

The Covid-19 induced lockdown might be bad for the rental market but many factors drove people to buy homes in the last one year. Both <keyword id="35507" type="PERSON" weightage="20" keywordseo="property-prices">property prices</keyword> and interest rates have become attractive. Added to that, in cities like Mumbai that had inventory, reduced stamp duty prices stirred the dormant property market. But it’s not just that. <keyword id="45123" type="CITY" weightage="20" keywordseo="HDFC">HDFC</keyword>, which gives out a fifth of the country’s <keyword id="35519" type="PERSON" weightage="20" keywordseo="home-loans">home loans</keyword>, says that its average size of loan has gone up to ₹30 lakh from ₹28 lakh in the last one year. At a time when property prices are falling (or stable at best) on an average, this could only mean that Indians are going in for bigger homes. “Homes are a lot more affordable now as income levels have gone up but home loan prices have either remained stagnant or come down. Interest rates are at an all-time now,” <keyword id="6419588" type="UNKNOWN" weightage="20" keywordseo="Keki-Mistry">Keki Mistry</keyword>, CEO of HDFC told Business Insider India. Yet another study by Bankbazaar too said that in 2020, average home loan sizes in all went up to ₹26.4 lakhs from ₹23.8 lakhs the year before. The loans taken out by women was a tad higher at ₹31 lakhs. <div type="Video" msid="80726505" hostid="261" title="The CEO of India's largest home loan company is happy because people are back to buying homes⁠— and bigger ones" dataSource="BUSINESSINSIDER" thumbUrl="https://denmark.timesinternet.in/cmslite/api/app/images.jpg?msid=80726505"></div> ‘All of us are one-room short’ The reason could be the yearning of space as families stayed locked in with more than two people working from home, on an average. “Today stars are aligned for realistic activity in work from home. All of us here are one room short of our houses. I'm staying in a four bedroom house. I want a fifth bedroom so that I can do my work properly,” said Nilesh Shah, MD of Kotak Mahindra Asset Management Company. Shah too mirrored Mistry’s sentiment saying that real estate prices have either stagnated since 2016 or come down. “The affordability index has come down from 50 to now about 28,” said Shah. Lower prices and lower interest rates coupled with good inventory could mean property buyers are now choosing to go for larger properties which now fit into their budgets. The falling average age of home buyers might also have had an effect on the choice for bigger homes. Younger people tend to prefer larger homes while older buyers prefer compact houses, and the young population of India might also aspire for larger homes going ahead. “The average age of home buyers is now at around 37-38 years now. Considering that two-thirds of the population is under 40, younger people will buy homes in the next 5-10 years,” said Mistry. If the work from home trend is here to stay, it might also be possible that the demand for spacious homes is here to stay. SEE ALSO: <a href="https://www.businessinsider.in/business/ecommerce/news/why-grofers-may-allow-an-american-blank-cheque-firm-to-buy-it-out-instead-of-fighting-ambani-and-bigbasket-for-ipo/articleshow/80874979.cms">Here’s why Grofers may allow an American “blank cheque” firm to buy it out instead of fighting Ambani and BigBasket for IPO</a> <a href="https://www.businessinsider.in/india/news/spicejet-and-indigo-stocks-take-off-as-a-2-hour-flight-could-now-cost-up-to-13000/articleshow/80873865.cms">SpiceJet and IndiGo stocks take off as a 2-hour flight could now cost up to ₹13,000</a> <a href="https://www.businessinsider.in/business/auto/news/centre-earned-100-crores-by-sharing-vehicle-registration-data-with-companies-such-as-bmw-axis-bank-bajaj-allianz-lt-and-others/articleshow/80879638.cms">Centre earned ₹100 crores by sharing vehicle registration data with companies such as BMW, Axis Bank, Bajaj Allianz, L&amp;T and others</a>

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Focused MFs' asset base rises 31% to Rs 1.43 lakh cr in June qtr; up to 60% returns last year

PTI

RBI tightens norms on personal loans for banks and NBFCs; stocks to be under pressure

Malini Bhupta

Rishabh Pant stars in HDFC Life's latest campaign on term insurance

PTI

HDFC Capital raises $376 million under alternative investment fund for affordable housing; ADIA is primary investor

Bhakti Makwana

WATCH: The CEO of India’s largest home loan company says people are going for bigger homes, thanks to the lockdown

Katya Naidu

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