Which mutual fund you should buy in stock market rebound — explained
- Mutual fund investors with one to two year perspective can look at hybrid equity funds instead of debt funds, say experts
Mutual funds: After strong beating in last one fortnight, Indian stock market registered strong rebound on Friday, signaling to come out of the base building mode. In such a scenario, short term mutual fund investors have an opportunity to cash-in through lump sum investment for one two years in hybrid equity funds as they tend to outperform traditional debt funds by around one per cent on one to two year time. They said that it is difficult to time the market and hence one should invest in two to three parts so that one can average one's NAV (net asset value), in case the rebound turns out as relief rally only. For a long term investor, increasing monthly SIP during the market fall may give additional NAVs to mutual fund investors as well.
Speaking on mutual fund investment strategy during stock market rebound, Pankaj Mathpal, MD & CEO at Optima Money Mangers said, "In stock market rebound that we witnessed on Friday after around 8-10 sessions, short term mutual fund investors can slightly enlarge one's time horizon and look to invest in hybrid equity funds that tends to outperform debt funds in one to two year time." Pankaj Mathpal said that mutual fund investors can look at multi asset funds and balanced advantage funds for around one to two year time horizon as it may give near one per cent more return in comparison to debt funds.
On how a long term investor can maximise during stock market rebound, SEBI registered tax and investment expert Jitendra Solanki said, "It is difficult to time the market during a volatile market but in case of continuous fall, a long term mutual fund investor can increase one's monthly SIP to get more NAVs during stock market fall or after continuous fall that we have witnessed in last one fortnight. This will help them get more value for their money till market comes back in bulls control."
SK Hozefa, CEO at Tradeplus said, "During volatile markets, it is essential to focus on creating a diversified portfolio of mutual funds that can provide a buffer against market fluctuations. A mix of index-based large, mid, and small-cap funds is best for most investors. Index-based funds aim to replicate the performance of a particular market index, such as the Nifty 50 or the BSE Sensex. These funds are a low-cost way to invest in the stock market and have a proven track record of delivering consistent returns over the long term."
Batting for regular review of one's portfolio, SK Hozefa said, "It's also important to regularly review and adjust your portfolio as needed to ensure it remains aligned with your goals and risk tolerance. Rebalancing your portfolio can help you maintain diversification and manage risk, while also taking advantage of opportunities that may arise in the market."
Disclaimer: The views and recommendations made above are those of individual analysts or personal finance companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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First Published:4 Mar 2023, 02:07 PM IST
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