These funds allocate less to equities when market valuations appear expensive, and increase allocation to equities when market valuations seem cheap.
The price-to-earnings ratio of Nifty is 23.89, a 19% premium to its 10-year historical average of 20.09, which makes many wealth managers advocate caution.
On the MF side, investors have Motilal Oswal Dynamic Equity Fund NFOs and Mahindra MF Kar Bachat Yojana; and among IPOs, 4 offers are lined up for September.
Balanced funds' AUM crossed the key Rs 50,000 crore for the first time owing to consistent inflows for over two years.
Most investors tend to look at last 1-year returns in a mutual fund scheme before choosing one to invest in. A fund which has outperformed its benchmark indices this year may end up being a loser tomorrow.
With the Nifty 50 moving up by 25 per cent and Nifty Midcap 50 rising by 35 per cent in a span of 6 months, stock picking has become difficult.
Market cap is calculated as the number of shares outstanding multiplied by the current market price of one share.
For buyers, this is a great opportunity. Unlike regular mutual funds where one buys units at the existing NAV , getting units at a discount is a great deal.
Since growth will be slow, the stimulus will continue from central banks, which will probably continue to drive the markets higher, says Baptist.
In the past four years, banks and non-banking financial companies (NBFCs) have raised close to Rs19,000 crore through these bonds.
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