Not keeping all your eggs in one basket is an old wisdom. It is apt for the current situation for investments in mutual funds as the uncertainty prevails over almost all sets of investment avenues. However, in every uncertainly lies an opportunity. Risk is invariable in the times of opportunity but it can be minimized.
Mutual funds, as products are crafted on the very same premise of minimizing risk and providing diversification to the investors irrespective of the size of the investable amount.
When the fears of global recession are hovering over world economies once again, Indian economic indicators are also not very encouraging. On the front of inflation, it is still out of control, the interest rates are still far from moderation, growth is slowing down and which is inevitable. Rupee devaluation is an area of concern, and ongoing monsoon will also play a critical role.
These diverse factors are casting a shadow on the various investment avenues. Volatility is likely to continue in capital markets, money markets, precious metals, foreign currency markets, real estate and so on. There will be opportunities in every market but the risk proportion will also be more than they are in the normal circumstances.
As the risk and return will remain equal in all instruments, it will be a wise decision to allocate more investment in less riskier products.
Categorically, the retail investors should take exposure in Equity, Balanced, Debt, Exchange Traded Funds (ETFs), Monthly Investment Plan (MIP) and Index funds. It will give a good spread to the investors. MIP will take care of the steady returns, Balanced funds will help in getting advantage of opportunities in the equity and debt market, and equity funds or ETFs which have negative correlation will help in generating returns whereas, Index funds will provide buying units at lower valuations.
The corporate investors should look at Equity, Liquid, Gilt and ETF. Parking of funds in Liquid and Guilt fund will ensure safety with returns whereas, Equity and ETF will open up opportunities arising in the volatile markets.
MF UPDATE
Tata announces change in face value
Tata Mutual Fund has decided to change the face value of Tata Floater Fund. Accordingly, the face value has been raised from Rs. 10 per unit to Rs.1000 per unit for all options / plans under the scheme. The changes will be effective from 1st July 2012.
Fidelity announces dividend
Fidelity Mutual Fund has announced dividend for Fidelity Wealth Builder Fund – Plan A, Fidelity Wealth Builder Fund – Plan B and Fidelity Flexi Gilt Fund. The quantum of dividend will be Rs. 0.10 per unit for Fidelity Wealth Builder Fund – Plan A & Fidelity Flexi Gilt Fund and Rs. 0.075 per unit for Fidelity Wealth Builder Fund – Plan B. The record date for dividend distribution is 28th June 2012.
JM declares dividend
JM Financial Mutual Fund has declared dividend under JM Arbitrage Advantage Fund, on the face value of Rs.10 per unit. The quantum of dividend will be Rs. 0.20 per unit as on record date. The record date for dividend distribution has been fixed as 27th June 2012.
Morgan Stanley announces dividend
Morgan Stanley Mutual Fund has announced dividend under the quarterly dividend option of Morgan Stanley Multi asset Fund - Plan A & B. The quantum of dividend will be Rs. 0.15 per unit for both the schemes. The record date for dividend distribution has been fixed as 29th June 2012.
Indiabulls revises exit load
Indiabulls Mutual Fund has announced to revise the exit load structure under Indiabulls Ultra Short Term Fund, an open ended debt scheme. Accordingly, an exit load of 0.50% will be charged if units are redeemed or switched out within 3 months from the date of allotment. The revised exit load structure will be effective from 26th June 2012.
Kotak announces change of name for its scheme
Kotak Mutual Fund has announced to change the name of Kotak Credit Opportunities Fund to Kotak Income Opportunities Fund. The changes will be effective from 9th July 2012.
HDFC revises exit load
HDFC Mutual Fund has announced to revise the exit load structure under HDFC Short Term Plan, an open ended income scheme. Accordingly, an exit load of 0.75% will be charged if units are redeemed or switched out after 9 months from the date of allotment. The revised exit load structure will be effective from 2nd July 2012.
