Stories
Choice AMC Expert Shares Smart Investment Strategies Amid Market Volatility
- •Equity mutual funds have recorded 66 consecutive months of inflows despite the Nifty falling around 14 percent from its January high.
- •Manish Jain advises investors to focus on asset allocation and valuations based on personal financial goals rather than chasing recent performance.
- •Small- and mid-cap funds accounted for 51 percent of equity inflows in August, while large-cap funds experienced outflows, prompting calls for caution regarding small-cap valuations.
- •Investors should maintain their systematic investment plans through market corrections to buy more units, rather than stopping contributions due to short-term volatility.
- •Hybrid or balanced-allocation funds are recommended for a three-year horizon, while longer horizons allow for higher equity exposure depending on risk appetite.
Key Questions Answered
Manish Jain, Deputy CEO at Choice AMC, advises investors to focus on asset allocation, valuations, and financial goals rather than chasing past performance or short-term market trends. He recommends keeping large- and mid-cap funds as the core portfolio and treating small-cap funds as a smaller, supplementary allocation due to high valuations.
Investors should maintain systematic investment plans (SIPs) through corrections because market pullbacks allow them to purchase more mutual fund units for the same contribution amount, though it does not guarantee gains or prevent further declines.
Investors with a three-year horizon can consider hybrid or balanced-allocation funds, whereas those investing for five years or longer may opt for a higher equity allocation, provided it matches their individual risk appetite and financial goals.
