Mutual Fund Strategy: In the midst of the Corona crisis, investors are investing in the market through mutual funds instead of investing directly in equities. Their confidence has increased once again on equity funds. This is the first time after 8 months in March, when net investment in equity funds has been positive. In March, there was a net inflow of Rs 9,115 crore in equity mutual funds. For the first 8 consecutive months, investors have withdrawn money from equity funds. While investment has come in the market through equity funds and SIPs, there has been a huge withdrawal from debt funds. However, fear still remains in the minds of investors due to the fear of a second wave of Corona. In the current situation, many people are confused about what the strategy should be as an investor. On this, we have prepared a report based on a conversation with AK Nigam, CEO and Director of BPN Fincap.
In the current era, the second wave of corona virus has become very dangerous in the country. More than 1 lakh cases are coming every day. The highest number of cases in the world are seen in 1 day There are also ups and downs in the market. In such a situation, investors are scared about their allocation. Experts say that investors should build their portfolio wisely in the new financial year. While preparing the portfolio, attention must be paid to the risk of taking your risk and the duration of the investment.
Focused funds may be a better option if you are an aggressive investor and have the ability to take the risk of the market. Focused mutual funds are also among the top performers in the multicap category in the last one year. The portfolio of focused funds is concentrated. It is made up of 25-30 shares. These funds can focus on any segment. Under focused strategy, more investment is made in those stocks which can do well. The advantage is more because there are fewer shares in the portfolio. However, the risk of loss is equally high.
Still space in midcap and smallcap
Midcap and Smallcap are also good for those investors who have the ability to take risks in the market and have an investment target of at least 7 to 10 years. Recently, Midcap and Smallcap Kategiri have outperformed, but this is due to low base. In the current era, there is still a lot of scope in these funds. Further, these segments will benefit from economic recovery.
Lorgecap or lodge and midcap
If investors do not want to take the risk, then LogCap can be an option for them. But the valuation of largecap stocks is very high, in such an index fund is a better option for those who want safe investment.
Multicap mutual funds are good options
If the ability to take risk is moderate, then multicap funds are a better option. Multicap mutual funds are a good option in the ups and downs of the market. Here too, your investment is in largecap, midcap and smallcap, which reduces the risk of portfolio diversification. For example, if there is a fall in the lordcap, then midcap or smallcap can balance it. Similarly, if there is a fall in the midcap or smallcap, then the lordcap can balance it.
SIP investors need not panic due to the current market fluctuations. In the current correction of the market, mutual fund investors have the opportunity to continue instead of stopping the SIP. When the stock market turns ahead, they will get the benefit. Stopping or withdrawing the SIP that is going on now, will cause damage.
Right now, investors are advised to stay away from debt funds. According to the latest data from the Association of Mutual Funds in India (Amfi), investors had withdrawn Rs 52,528 crore from debt mutual funds last month, compared to Rs 1,735 crore in February 2021. The bond yield has eluded investors from this segment.