India remains an attractive destination and the recent sell-off has made valuations attractive in the large-cap space.
The RBI advisory follows a labour ministry request earlier this year seeking the central bank's expertise to identify gaps in EPFO's investment strategy and fund management practices, including accounting, risk management, and internal governance.
With the RBI infusing Rs 7.5 lakh crore in liquidity -- and possibly more in the future -- the short- to medium-term corporate bond market is expected to benefit.
India is growing fast, but to keep growing strong, the government must make more things at home, create jobs, and spend money wisely, suggests Rajiv Memani, regional managing partner, Africa-India Region, EY.
With the interest rate cut cycle nearing its end, several debt fund managers are shifting their focus towards interest income rather than betting on duration in anticipation of capital gains.
Domestic mutual funds have infused the highest ever -- Rs 4.84 trillion -- this year amid strong inflows via SIPs.
rediffGURU Jinal Mehta answers readers' financial planning and health insurance queries
Business cycle funds aim to optimise returns by aligning their portfolios with different phases of the economic cycle. First-time investors, those who prefer stable sector allocations, and those averse to volatility should steer clear of them.
Following the sharp run in markets, valuations across the board have become elevated. The National Stock Exchange Nifty50 Index now trades at a 12-month trailing price-to-earnings (P/E) multiple of 24.3 times, 18 per cent higher than this year's low of 20.5 times. The valuation expansion in the broader markets has been sharper.
The rising market poses a dilemma for investors on whether to continue buying, reduce equity holding, or exit equities altogether.
Do you have financial planning queries? Ask rediffGURU Anil Rego.
'...not merely in managing fiscal mathematics, but in demonstrating conservatism and prudence within that framework.' 'Looking forward, we believe sufficient growth drivers exist -- ranging from government reforms to revival in consumption to favourable monsoons. Numerous factors support the Indian economy.'
rediffGURU Ulhas Joshi answers your mutual fund queries.
So, the next time someone tempts you with a slightly higher FD rate from a lesser-known bank, point them to hybrid funds that can deliver extra returns without the administrative and emotional rollercoaster.
'Investors' decisions should reflect their financial goals, risk tolerance, and the amount of gold already present in their portfolio.'
If a 5% to 10% fall in the equity market gives you sleepless nights, you are not cut out for a 75% to 80% allocation to equities and must reduce it.
The mutual fund (MF) industry had an action-packed 2023 as it tackled the scrapping of tax benefits for debt fund investors and surging flows into equity funds.
Apart from the emotional value attached to buying gold, the yellow metal offers protection against inflation, interest rate spikes, currency and geopolitical risks, says Anamika Pareek.
'For most investors, I recommend a low double-digit allocation (10 to 12 per cent) to gold and silver combined.'
Fund houses are exploring ways to differentiate themselves in the hybrid space. A relatively unknown hybrid fund variant, Balanced Hybrid, is about to see its first launch since the introduction of mutual fund (MF) scheme categorisation norms in 2017. WhiteOak Capital MF has filed papers with the regulator for this scheme, which comes amid increasing interest in the hybrid space. MFs anticipate that hybrids will become the preferred category for investors with a lower risk appetite following changes in debt fund taxation.
'When interest rates rise, the NAVs of these funds will fall.' However, they won't fall as much as longer-duration funds.
'As we navigate uncertain waters, a conservative approach to largecap investing could provide a strategic advantage.'
'Asset allocation should be driven much more by long-term factors rather than the market scenario at any particular point in time.'
Here's what Indian investors diversifying into equities, ETFs, and real estate abroad to manage risk, returns, and currency exposure must watch out for.
Investor folios exceed 2 million, assets more than double since FY14.
Retail investors have matured and have moved away from investing in only in-vogue products, says the managing director and chief executive officer of ICICI Prudential AMC.
'If rate cuts happen, bond yields will come down and investors will make mark-to-market capital gains on them.'
'Investors should not go for lump-sum investments in infrastructure funds at this point.' 'The SIP route is the best to avoid any major disappointment.'
'If gold's recent surge has increased its allocation beyond 15 per cent in your portfolio, now may be a good time to rebalance.'
'Investors need to expect steady returns over the next one to two years with bouts of high volatility.'
Do you have financial planning queries? Ask rediffGURU Anil Rego.
If you spread your investments and get exposure to many asset classes, then that is called diversification. Asset allocation is the process of allocating your money to different investments. And they offer tremendous advantages, says Rishi Piparaiya.
'Your decisions should not be driven by your view on the market, but by your objectives, risk appetite, and time horizon.'
The aggressive life cycle fund will allow equity exposure of up to 75%, up from the current limit of 50%.
Investors can sell their entire equity and move to debt when stocks get expensive
Mutual funds (MFs) are set to be net sellers of Indian equities for the first time in the past seven financial years, having sold stocks worth about Rs 1.27 trillion so far in 2020-21 (FY21), making it the highest net sales on record in a financial year. MFs had been net buyers in the previous six financial years, including purchases of over Rs 1.41 trillion in FY18, Rs 88,152 crore in FY19, and Rs 91,814 crore in FY20. The last time they offloaded Indian equities was in FY14, when they net sold stocks worth Rs 21,159 crore. In contrast, foreign portfolio investors (FPIs) have ramped up buying in FY21, purchasing more than Rs 2.6 trillion worth of shares.
'If an investor is ready to stay put for the next five years, one can consider investing in mid- and small-cap funds, but through SIPs.'
'Set aside around six months' monthly expenses for emergencies.' 'Keep this money in safe and liquid options, such as liquid funds and fixed deposits.'
'Do some profit booking and bring your equity allocation back to its original level.'
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
