After a robust 2023, foreign investors significantly scaled back their investments in Indian equities in 2024, with net inflows amounting to over Rs 5,000 crore, as elevated domestic valuations, coupled with geopolitical uncertainties prompted investors to adopt a more cautious stance. Looking ahead to 2025, FPI flows into Indian equities could see a recovery, supported by a cyclical upswing in corporate earnings, particularly in domestic-oriented sectors like capital goods, manufacturing, and infrastructure, Vinit Bolinjkar, head of research, Ventura Securities, said.
Retail investors now own a larger share of smallcap companies than they did a year ago, thanks to their conviction in mutual fund (MF) schemes focused on this segment. Data from Capitaline shows that MFs' average holding in the National Stock Exchange Nifty Smallcap 250 Index stood at 9 per cent at the end of the October-December quarter of 2023-24 (FY24), up from 7.76 per cent in the same quarter of 2022-23.
The share of equity and investment funds in the total financial wealth of households increased by more than 50% between 2011-2012 and 2022-2023.
'It's advisable not to go overboard on a banking sector fund or any other sector fund.'
Diversification and asset allocation can reduce uncertainty
Avoid discontinuing your SIPs. Persist for at least 7-10 years.
Rebalance your portfolio in case it has become overweight on equities vis-a-vis your strategic asset allocation.
The amount allocated for 2019-20 is 11 per cent higher compared to Rs 55,000 crore allocated for the year 2018-19.
Stock market investors became richer by a whopping Rs 77.66 lakh crore in 2024, helped by an overall optimistic trend in equities, where the BSE Sensex surged over 8 per cent. Analysts said the year witnessed a tug of war between the bulls and bears marked by volatility but, despite the uncertainties around the world, the Indian markets sustained the pressure and delivered impressive returns.
Asset allocation - the way you divide your capital among different investment options - accounts for more than 90 per cent of your portfolio's overall return. Which is why it's so very important to get the asset allocation right in your investment portfolio.
'The minimum holding period for equities should be three years.' 'Try goal-based investing.' 'Link your equity portfolios to specific goals such as retirement, purchase of a house or car...'
'A 10 to 15 per cent allocation to gold in portfolios reduces risk without compromising on potential returns.'
Do you have financial planning queries? Ask rediffGURU Anil Rego.
Equity mutual funds witnessed an inflow of Rs 35,943 crore in November, marking a drop of 14 per cent on a month-on-month basis, amid heightened volatility in stock markets driven by various macroeconomic factors, geopolitical events and US election results. Despite this, it marked the 45th consecutive month of net inflows into equity-oriented funds, reflecting the growing popularity of mutual funds among investors, according to data from the Association of Mutual Funds in India (AMFI) released on Tuesday.
Now govt employees to enjoy greater say in how their NPS corpus is invested. Younger employees should raise their allocation to equities in this very long-term investment instrument
The cash pile within smallcap mutual fund (MF) schemes has grown over the past few months amid a relentless rally in stocks in this space. While fund managers usually don't make cash calls, incessant inflows and valuation discomfort have forced their hand. At the end of January, the top 10 schemes had over Rs 12,160 crore in cash, compared to Rs 8,700 crore in August 2023.
NPS is a cost-effective instrument with low fund management and other fees. Unlike in mutual funds, investors get the benefit of tax-free rebalancing here.
'For those seeking regular income, these funds provide a steady stream of income through dividends.'
Most investors should have a 5% to 10% allocation to gold for diversification. They should stagger their investments to mitigate timing risk.
Analysts remain bullish on the road ahead for the equity markets, but warn against volatility on account of domestic and global cues. The upcoming Lok Sabha elections back home and the interest rate trajectory of the US Federal Reserve, they said, will be the two most important factors that the markets will keep a tab on. That apart, the valuation of the Indian markets, they feel, will also be eyed in context of how global peers are performing.
Ask rediffGURU and PF and MF expert Janak Patel your mutual fund and personal finance-related questions.
Stay away from hot stocks and stick with the long-term performers that fit within your asset allocation needs.
If you are overweight on fixed-income instruments, go for ELSS, and vice versa.
The bulk of an investor's portfolio should be in shorter-duration funds of up to one year portfolio duration.
Equity-focused schemes may perform better in a bull market, while debt-oriented ones may offer greater stability during volatile periods.
Simply put, asset allocation entails holding a portfolio comprised of various asset classes like equity and debt, among others. Over longer time frames, asset allocation can help investors protect their portfolios on the downside and create wealth as well. Powered by investments in both equity and debt, balanced funds qualify as asset allocation tools. The debt component in balanced funds can insulate the investor's portfolio from the volatility in the equity markets.
Let reason, not emotion, guide your decisions.
The recent stimulus measures announced by China have seen most analysts sit up and take notice.
With an 11% return in 2022, gold was the best-performing asset class, beating equities, debt, real estate etc, by a considerable margin. Rishi Piparaiya explains why gold needs to be a part of our investment portfolio.
All investors should ideally have a 10 to 15 per cent allocation to gold. Whether they invest in gold ETFs or SGBs should depend on their investment horizon.
'The private sector will look to the budget to check whether there are any headwinds or tailwinds.'
Several investors wanting to invest in mutual fund schemes, amid the selloff in the market on Tuesday, were left in the lurch as online MF investment platforms failed to execute the transactions on time.
An allocation to ESG theme funds can bring down the overall risk of an equity portfolio. Investors with long-term financial goals, such as retirement, should not ignore sustainable investing.
Avoid discontinuing your SIPs. Persist for at least 7-10 years.
Investors with moderate risk profile and investment horizon of over three years could look at investing in balanced funds.
Unfazed by the Supreme Court upholding winding up of the company, shareholders of Devas Multimedia will continue to seek seizure of Indian government assets abroad to collect $1.2 billion the firm has been awarded by arbitration tribunals for cancellation of a satellite deal but are open for talks to settle the issue, their counsel said. "The decision by the Supreme Court does not change anything. The Modi government and the Indian courts cannot rewrite the facts. "Their flimsy allegations of fraud will never stand up in courts outside of India," said Matthew D McGill, partner at Gibson, Dunn & Crutcher, and lead counsel for several Devas' shareholders.
As an investor, are you ready to benefit from the positives and to counter the negatives of 2005? Here's a guide to help you with your investment decisions.
Resist the temptation to react to every move of the market and remain disciplined with your investments till you reach your financial goal.
'This market is very expensive in some pockets, dirt cheap in some, and the belly of the market is reasonably valued.'
Mid-cap and small-cap mutual fund schemes have continued to attract strong investor interest, garnering nearly Rs 30,350 crore in inflows during the April-September period of the current financial year, driven by impressive returns delivered by these segments. In comparison, the cumulative inflow into mid-cap and small-cap funds stood at Rs 32,924 crore during the same period last year, according to data from the Association of Mutual Funds in India (Amfi).
