Street signs: MFs turn cautious on ICICI, India Vix turns benign, and more

MFs turn cautious on ICICI Bank

The ICICI Bank stock has fallen over 7 per cent in the last month as investors have turned cautious after allegations of corporate governance lapses at the private sector bank. Several domestic mutual funds (MFs) have trimmed their exposure to the stock. According to data, ICICI Prudential Asset Management Company sold 21 million shares of ICICI Bank during May while Birla Sun Life has sold nearly 9 million shares in the same month. HDFC Mutual Fund has also sold 5.5 million shares of the private lender. 

Pavan Kumar Burugula

India Vix turns benign
 

The volatility gauge—the India Vix index—slipped to its lowest in a month and a half on Friday. The index had spiked to 14.42 just before the markets lost over 3 per cent in the second half of May. While this may suggest that market players are expecting a calm ahead, volatility could come back to haunt Dalal Street with US President Donald Trump approving new tariffs worth $50 billion on Chinese imports. The European Central Bank indicating winding down of its stimulus programme could also be a cause for concern when markets resume trading on Monday.

Jash Kriplani

Now pay less for MF schemes
 

Two recent moves from the market regulator. Securities and Exchange Board of India, are expected to reduce costs for mutual fund investors. The additional expense charged in lieu of exit loads by mutual fund schemes has been reduced to 5 basis points (bps) from 20 bps earlier. From  April 1, fund houses were restricted from charging an extra commission of 30 bps for incremental flows from the beyond top 30 cities as opposed to the beyond top 15 cities earlier. Both these moves may reduce cost of investing in mutual funds by 15-45 basis points, said experts.

Ashley Coutinho