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Most mutual fund advisors are asking risk-averse investors to consider investing in relatively-safer banking & PSU funds these days.

Value investors are always trying to buy stocks that they believe are undervalued in the market. They hope that the market may realise or discover the true value of these stocks one day.

Dynamic bond funds are meant for debt mutual fund investors who do not want to take calls on the interest rate movements in near term. Interest rate changes have a significant impact on debt funds, especially long-term and gilt schemes.

Gilt mutual funds are considered ideal for long-term debt mutual fund investors with an aggressive risk profile. However, these schemes are extremely sensitive to interest rate environment.

Axis Bluechip Fund: Fund review

In the past five-year and ten-year periods, the scheme has given 6.5% and 9.6% returns, respectively, while its peers have given average returns of 1.6 % and 6.3%, respectively, over the same periods.

In times when estimates and assumptions are being questioned or proven wrong consistently due to unforeseen factors, it makes sense to stick with equity schemes that have been through long market cycles. Schemes which have been in existence for more than 15 years is a good criterion.

ICICI Prudential Balanced Advantage has given returns of 7.2%, 11.5% and 11.4% in the past five-year, seven-year and 10-year periods, while its peers have given an average return of 5.8%, 10.2% and 8.9% respectively over the same periods.

The five-year-old fund has beaten its benchmark S&P BSE 150 Midcap TRI over 1-, 3- and 5-year periods. Although it is the topper in one-year return, it lags peers in 3- and 5-year return.

The NFO of Sundaram Balanced Advantage Fund would remain open for subscription till February 28. The scheme reopens for ongoing subscription and redemption from March 12.

Best arbitrage mutual funds to invest in 2020

Some fund houses have conveyed to their investors that it is not wise to bet on arbitrage funds with a very short investment horizon due to shrinking arbitrage spread in a volatile market.

As per Sebi norms, corporate bond funds have the mandate to invest at least 80% of their corpus in the highest-rated corporate bonds. That means these schemes would invest most of their corpus in corporate bonds that are rated AAA.

Investors can consider multi-asset schemes, which have exposure to equity, debt and commodities. This provides stronger diversification than just plain balanced plans.

Mutual fund managers and advisors recommend short duration mutual fund schemes to conservative investors looking to invest in debt mutual funds for a year or two.

In the past five-year and 10-year periods, the scheme has given 10.5% and 17.5%, respectively. Its peers in the same periods have given average return of 7.8% and 10.5%, respectively.

Best conservative hybrid schemes to invest in 2020

We have noted that the performance of Nippon India Hybrid Bond Fund continues to suffer - the scheme is in the fourth quartile for the last three months. It was in the third quartile for three months before that.

Did large-caps beat mid- and small-caps? Which mutual fund houses boasted of superior performance? Though benchmark indices shot up in 2019, the broader market didn’t do too well. ET Wealth analyses the returns of diversified equity mutual funds across time periods.

If you are a conservative equity investor looking to grow your investment without too much volatility over a long period, you should consider investing in aggressive hybrid schemes.

Among multi-cap schemes, Kotak Standard Mulitcap is a stable performer in longer duration cycles of markets. The scheme’s fund manager Harsha Upadhyaya has been careful in the construction of the portfolio.

"Axis All Seasons Debt Fund FOF is a unique product in the debt basket. It aims at adequate diversification. Especially at this point when there is a lot of confusion among investors about debt funds, this can be a go to scheme."

Best multi cap mutual funds to invest in 2020

Here is an update about the poor performance of Motilal Oswal Multicap 35 Fund. The scheme slipped to the fourth quartile. It was in the third quartile in two successive months earlier.

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