Fund Philosophy

Contained headline inflation and slower growth is positive for fixed income market. It will not only help RBI to infuse necessary durable system liquidity but also opens up the possibility of further rate cuts. Global growth inflation dynamics also prompted other key central banks to maintain their growth supportive stance. All these factors are favourable for the domestic fixed income market. Hence, in the near term interest rate movement is likely to be range bound with softer bias. However, over the medium term, Government’s commitment towards fiscal deficit target, crude price movement, progress of monsoon and FII flows are likely to impact the market sentiment.

Overview of Market

Equity Markets Continue to Soar

The month of July saw the new government present the Union Budget for FY2024-25. It focused on addressing concerns around employment through measures to promote skill development, support employment generation and increased focus on social development. Capex outlay remained unchanged from interim budget (3.5% of GDP), while adhering to the fiscal consolidation roadmap while projecting a fiscal deficit of 4.9% of GDP for FY2024-25. Equity markets continued scaling new heights throughout the month. Domestically, despite hike in capital gains taxes in the Union budget, the benchmark Nifty continued its march upwards, closing the month just shy of 25,000 points (which it subsequently crossed on 1st August).

Fixed-Income Markets Stabilize

In the fixed-income markets, the 10Y G-Sec softened to 6.92% on positive foreign flows and strong macroeconomic fundamentals. Rainfall volume and distribution have progressed with most regions now in surplus or marginally below their long-term monsoon averages. A strong monsoon is essential in driving a rural recovery and keeping food prices in check.

Global Monetary Policy Shifts

Globally, the Bank of England followed the ECB with a 25 bps rate cut in its July meeting. While the US Federal Reserve did not cut rates, the latest inflation readings and the comments from the US Federal Reserve have laid the groundwork for a rate cut at its next meeting in September. From a sectoral point of view, IT (~12%), Pharma (~9%), FMCG (~9%) and Auto (~6%) and Energy (~5%) were the top gainers, while Metals (~2%) and Bank (~2%) were the top losers. During the period, FIIs bought equities to the tune of Rs 5,408 Cr and DIIs bought equities to the tune of Rs 23,486 Cr. FPIs were net buyers of Indian equities to the tune of Rs 32,365 Cr.

Equity

There were no major surprises in Q1 FY25 corporate earnings released during the month. Going ahead, net flows might be the key driver for the markets. Currently the benchmark Nifty 50 index is trading at a PE of 22x of Jun’25 earnings. However, we believe sectors aligned to rural and household demand revival could eventually outperform considering the low base effect, even better than normal monsoon remain supportive for these stocks and sectors

Fixed Income

US bond yields fell significantly (50 bps over 2 weeks) as softer inflation data and subsequent comments from the Federal Reserve were interpreted to mean near-certain rate cuts in September. In July, the domestic bond market was driven by strong FPI flows (~Rs 22,000 Cr), helped by lower amount of net borrowings in FY24 vis-à-vis FY24. The shorter end of the IGB yield curve appears more attractive in the near term, given the global developments and expectations of rate cuts in early CY25.

Investor Philosophy

Vision

To be the preferred Life Insurer; to ensure Safety, Liquidity and Profitability of funds, encompassing integrity and transparency in its operations, with an overall objective to meet the Reasonable Expectations of Policyholders.

Objectives

To invest the funds in matching assets, to the extent possible, so as to meet the liabilities as and when due To effectively manage the portfolio of investments to yield optimum return To be compliant with all Regulatory norms and to follow prudent practices in operations To carry out the fund management activities in a cost efficient manner

Company Initiative

Provide customers with the best solutions & services

Attract and retain talent and imparts training to the manpower to develop the needed skill sets; In-house Research team and framework for informed fund management decisions. State of the art Investment Management System seamlessly integrating the Front, Mid and Back offices, to effectively manage risks, investment accounting, MIS etc

Modified NAV Computation

As per IRDA Circulars ref: IRDA/F&I/CIR/INV/173/08/2011 dated July 29, 2011 and IRDA/F&I/CIR/INV/187/08/2011 dated August 17, 2011, computation of Net Asset Value stands modified with effect from August 18, 2011, as below:

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New MethodView All