With the benchmark index - BSE Sensex - up by 10,920 points from its April low level and reaching at the level of 84,058 on Friday, market experts recommend that flexi-cap and large & mid-cap funds continue to be attractive investment options and to balance the portfolio, add short-duration debt or equity arbitrage funds for stability, and include gold or multi-asset funds to diversify amid global uncertainties.
“Large & Mid Cap and flexi-cap funds are still very well worth investments. Add short-duration debt or equity arbitrage for stability and gold or multi-asset funds for diversification against the backdrop of global uncertainties,” Rajesh Minocha, a Certified Financial Planner (CFP), Founder of Financial Radiance shared with ETMutualFunds.
Also Read | Explained: Investing in mutual funds? 10 key things to check to make better investment decisions
While traditional equity categories like flexi-cap and large & mid-cap are sound for long-term investing, another expert advises a balanced approach is required rather than just considering equities, and suggests multi-asset funds to navigate current market conditions.
“A balance approach is suitable rather than only looking at equities. No doubt standard categories like Flexicap, Large & Midcap, Multicap are good from long term point of view but also looking at multi asset funds having diversified asset classes should be considered during current times,” Umeshkumar Mehta, CIO at SAMCO Mutual Fund shared with ETMutualFunds.
On April 7 the benchmark index was at the level of 73,137, the lowest in the current financial year so far. The BSE Sensex has gone up by nearly 3% in the last five trading sessions from a level of 81,896 on June 23 to 84,058 on June 27.
Benchmark index - BSE Sensex - touched its all-time high level on September 27, 2024. It touched a level of 85,978.25.
In the last one month, Sensex has gained 3.07% and 8.31% in the last three months. In the current calendar year so far, the benchmark index has gone up by 7.57% and by 6.81% and 6.07% in the last six months and one year respectively.
With the benchmark on surge since the last six months, the experts advice that one should book profits only if they are close to their goals else the long-term investors should not worry about the profit bookings and fresh investments can be staggered for six months through STP mode.
Also Read | Parag Parikh Flexi Cap Fund, Quant Small Cap Fund among 17 mutual funds which deliver over 20% XIRR on SIP investments in 10 years
Mehta mentioned that the market is still climbing a wall of worry on the back of yet to come tariff hikes, if any, from the US which now again is likely to be postponed. “However, on the other side, IPOs are gaining momentum which can cause roadblocks to this rally. Investors should keep their heads down and remain invested for a decade to see amazing wealth creation in both lumpsum mode and SIP mode of investments. Fresh investment can be staggered for 6 months through STP mode,” he added.
On the other hand, Minocha advises that if you are near to your goal consider profit booking, otherwise continue with the investment and one should continue with their respective SIP and consider STP for lumpsum investments.
“You should book profits if you are close to your goals, else returns can erode by the time you want to withdraw funds. However, long-term investors should not worry about booking profits. They should continue SIP and consider STP for lump-sum deployment,” Minocha said.
ETMutualFunds further analysed the performance of equity mutual funds since April’s low till date. The data showed that there were around 21 equity mutual fund categories, and all have yielded double-digit average returns.
Out of these 21 categories, technology sector based funds gave the highest average return of around 22.92%, followed by international funds which gave 21.79% average return.
Mid cap and small cap gave an average return of 20.63% and 20.56% respectively. Large & mid cap funds offer 18.22% average return. Flexi cap funds gave 17.10% average return. Large cap funds stood at third last position in the return chart and gave an average return of 15.07%. Consumption and Pharma & healthcare funds gave 12.66% and 11.40% respectively in the said period.
Post looking at the performance of the equity mutual funds since April’s low, Mehta recommends that rebalancing should happen at fixed intervals not because the market has moved up.
“Rebalancing should happen at a fixed interval, say the birthday of the investor or an important festival day like Diwali. Just because markets have moved should not be the reason for rebalancing of the portfolio. One needs to be goal oriented and align the portfolio accordingly, the goals should not change looking at the market conditions," said Mehta of SAMCO Mutual Fund.
Also Read | MNC mutual funds struggle to perform, lose 3% in 1 year. What’s driving the underperformance?
While Minocha recommends that rebalancing involves trimming overweight equity exposure, especially in large caps, as FIIs generally invest in large caps, offering them relatively easier exits, and realigning with the original asset allocation, and it is important to stay with your plan and not succumb to market noise.
One should always invest based on their risk appetite, investment horizon, and goals.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and Twitter handle.
“Large & Mid Cap and flexi-cap funds are still very well worth investments. Add short-duration debt or equity arbitrage for stability and gold or multi-asset funds for diversification against the backdrop of global uncertainties,” Rajesh Minocha, a Certified Financial Planner (CFP), Founder of Financial Radiance shared with ETMutualFunds.
Also Read | Explained: Investing in mutual funds? 10 key things to check to make better investment decisions
While traditional equity categories like flexi-cap and large & mid-cap are sound for long-term investing, another expert advises a balanced approach is required rather than just considering equities, and suggests multi-asset funds to navigate current market conditions.
“A balance approach is suitable rather than only looking at equities. No doubt standard categories like Flexicap, Large & Midcap, Multicap are good from long term point of view but also looking at multi asset funds having diversified asset classes should be considered during current times,” Umeshkumar Mehta, CIO at SAMCO Mutual Fund shared with ETMutualFunds.
On April 7 the benchmark index was at the level of 73,137, the lowest in the current financial year so far. The BSE Sensex has gone up by nearly 3% in the last five trading sessions from a level of 81,896 on June 23 to 84,058 on June 27.
Benchmark index - BSE Sensex - touched its all-time high level on September 27, 2024. It touched a level of 85,978.25.
In the last one month, Sensex has gained 3.07% and 8.31% in the last three months. In the current calendar year so far, the benchmark index has gone up by 7.57% and by 6.81% and 6.07% in the last six months and one year respectively.
With the benchmark on surge since the last six months, the experts advice that one should book profits only if they are close to their goals else the long-term investors should not worry about the profit bookings and fresh investments can be staggered for six months through STP mode.
Also Read | Parag Parikh Flexi Cap Fund, Quant Small Cap Fund among 17 mutual funds which deliver over 20% XIRR on SIP investments in 10 years
Mehta mentioned that the market is still climbing a wall of worry on the back of yet to come tariff hikes, if any, from the US which now again is likely to be postponed. “However, on the other side, IPOs are gaining momentum which can cause roadblocks to this rally. Investors should keep their heads down and remain invested for a decade to see amazing wealth creation in both lumpsum mode and SIP mode of investments. Fresh investment can be staggered for 6 months through STP mode,” he added.
On the other hand, Minocha advises that if you are near to your goal consider profit booking, otherwise continue with the investment and one should continue with their respective SIP and consider STP for lumpsum investments.
“You should book profits if you are close to your goals, else returns can erode by the time you want to withdraw funds. However, long-term investors should not worry about booking profits. They should continue SIP and consider STP for lump-sum deployment,” Minocha said.
ETMutualFunds further analysed the performance of equity mutual funds since April’s low till date. The data showed that there were around 21 equity mutual fund categories, and all have yielded double-digit average returns.
Out of these 21 categories, technology sector based funds gave the highest average return of around 22.92%, followed by international funds which gave 21.79% average return.
Mid cap and small cap gave an average return of 20.63% and 20.56% respectively. Large & mid cap funds offer 18.22% average return. Flexi cap funds gave 17.10% average return. Large cap funds stood at third last position in the return chart and gave an average return of 15.07%. Consumption and Pharma & healthcare funds gave 12.66% and 11.40% respectively in the said period.
Post looking at the performance of the equity mutual funds since April’s low, Mehta recommends that rebalancing should happen at fixed intervals not because the market has moved up.
“Rebalancing should happen at a fixed interval, say the birthday of the investor or an important festival day like Diwali. Just because markets have moved should not be the reason for rebalancing of the portfolio. One needs to be goal oriented and align the portfolio accordingly, the goals should not change looking at the market conditions," said Mehta of SAMCO Mutual Fund.
Also Read | MNC mutual funds struggle to perform, lose 3% in 1 year. What’s driving the underperformance?
While Minocha recommends that rebalancing involves trimming overweight equity exposure, especially in large caps, as FIIs generally invest in large caps, offering them relatively easier exits, and realigning with the original asset allocation, and it is important to stay with your plan and not succumb to market noise.
One should always invest based on their risk appetite, investment horizon, and goals.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and Twitter handle.
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