Mutual Fund

Which equity mutual funds to look at as stock mkt corrects? Fund managers answer


Russia’s attack on Ukraine, rise in oil prices have pushed global as well as domestic stock markets deep into the red, with FIIs pulling out funds by selling Indian stocks. Spike in oil & other commodities would certainly impact country’s financials and Corporate India, believe experts.  

India’s medium term outlook remain stable and provides reasonable upside for investors with a 3 years plus horizon, said Srinivas Rao Ravuri, CIO PGIM India Mutual Fund.

“Investors with low risk appetite should focus on balance advantage funds (BAF) and large cap funds. However, investors with a long term horizon can consider Flexi cap and midcap funds as well,” advised Ravuri on the kind of equity mutual funds investors with a lower appetite for risk can look at the current juncture.

From investors point of view, this crisis highlights risk associated with investing into equity markets and volatile nature of stock markets. In a matter of few weeks we are moving from exuberance and extreme caution, Ravuri of PGIM MF added.

Edelweiss AMC’s Trideep Bhattacharya, CIO-Equities has recommended a flexi-cap fund or a Large & Mid-cap Fund in current circumstances for investors with lower risk appetite. However, the medium-term asset allocation of the investor should also be kept in mind in this process, he added.

“Impact of the Russia-Ukraine conflict is more from a crude/commodity price perspective. At higher levels of commodity prices some amount of demand destruction is logical to assume and hence medium to long term these levels are not sustainable,” said Chandraprakash Padiyar, Senior Fund Manager, Tata Mutual Fund.

Risk reward is gradually improving from 1:1 towards better levels, therefore, Padiyar believes long term trends for higher economic growth in India remains intact and thus, short term stock market correction can be used as an opportunity to invest.

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