Most equity-oriented funds invest in a sizeable portfolio of 45-60 stocks to achieve optimal diversification. However, the performance of a fund over a period is usually driven by a few selected stocks having higher weightage in the portfolio. Though diversification is an important aspect of fund management, beyond a point diversification does not add much…
Prevailing market sentiments predominantly drive stocks, which may cause the inappropriate pricing of some fundamentally sound stocks in the short run, discouraging potential investors. However in the long run, some of these stocks may grow to reflect their true value and reward investors for their patience. Such stocks could be major beneficiaries of economic recovery.…
The Indian equity market started on a strong note in October on further improvement in economic activities. The new ‘Unlock’ guidelines allowed reopening of theatres, dine-in at restaurants, resumption of metro services, among others, albeit at limited capacity. This cheered investor sentiments and consequently the benchmark indices soared close to its record high levels. However,…
Aggressive Hybrid Funds are equity-oriented hybrid funds having a mix of equity and debt instruments in their investment portfolio. A combination of these asset classes offers a high level of diversification, hence, lowering the risk as compared to a pure equity funds. The equity assets in this category of funds range between 65%-80% of its…
Six months after Franklin Templeton wound up six of its debt schemes, the Karnataka High Court has pronounced its judgement in the case. If you recall, the Supreme Court had transferred all legal cases relating to winding up of the schemes to Karnataka High Court in June and directed that the matter be completed within…
The Association of Mutual Funds in India has issued a circular on nomenclature to be used by mutual funds distributors (MFD). According to the circular, MFDs can longer call themselves as advisors. As per Regulation 3(3) of the SEBI (Investment Advisers) Regulations, 2013 notified on July 3, 2020 – ‘No person, while dealing in distribution…
Diversification across geographical boundaries can help mitigate portfolio risk. Exposure to foreign equities can potentially give you higher returns when other economies grow at a faster pace than the domestic economy. It also enables you to exploit a particular opportunity only available in offshore markets. Moreover, it can act as a hedge against rising foreign…
A significant number of large cap funds have struggled to outpace the benchmark index in the last few years. However, if you have invested in a large cap fund to achieve a particular goal, it is important to ignore the short term underperformance and stay invested till you reach the set target. Mutual fund managers…
In April, when the debt securities faced heightened redemption pressure amid COVID-19 crisis, liquidity in the market dried up. Therefore, many debt mutual funds opted for inter scheme transfers (IST) of bonds from riskier categories to other schemes of the fund house to meet redemption demand. The data from SEBI shows the number of inter…
The equity market has recovered most of the losses since its lows of March. S&P BSE Sensex, the bellwether index, has now reclaimed 40,000 levels for the first time since February. Anticipation of better Q2 corporate earnings, improvement in business activities, US stimulus package hopes, among others have been the encouraging factors for the markets.…
