Conservative investors seeking equity-like tax benefits with low risk may go for them.
The volume of new fund offerings (NFOs) in 2025 will fluctuate based on market conditions. However, innovation is expected to continue unabated. With an increasing number of fund houses aiming to establish a presence in the 'factor' investing space and changes in fund-of-fund taxation providing more opportunities, several industry-first offerings are anticipated.
Dwaipayan Bose explains what momentum investing is, how it works, why it generates higher returns and has higher wealth creation potential.
'If gold's recent surge has increased its allocation beyond 15 per cent in your portfolio, now may be a good time to rebalance.'
Arbitrage funds, the new favourite of individual investors, delivered their best performance in nearly a decade in 2024. On average, the schemes delivered 8 per cent return last year, the highest since 2016, according to data from Value Research. The returns were supported by positive equity market sentiments, surge in open interest in stock futures, high interest rate, among other factors, analysts said.
Momentum funds can be 10 to 15 per cent more volatile than the Nifty 50.
Multi-asset allocation funds emerged as the most popular option for MFs as they provided the needed flexibility.
'Investing in a factor-based fund can be beneficial provided you have chosen the right factor.'
TMFs invest in a public index, so investors know beforehand which instruments the fund will invest in.
While there is little one can do when the fund house restricts redemptions, it's best to exit even if it means some losses.
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