INSUBCONTINENT EXCLUSIVE:
When the benchmarks scale new peaks, what must small investors do? That answer lies in their risk appetite, which by itself is a function of
familiarity with D-Street.
So, the choices will differ for those buying equity offerings for the first time, and those that have seen
multiple business cycles play out over the years.
Those beginning their investment journey are better off choosing balanced advantage funds,
which are less volatile than pure equity funds
For the seasoned professional who can take the rough and tumble of D-Street with consummate ease, the riskier choices in equities seem
Joshi said these funds have low volatility, and calibrate their equity exposure based on market valuations.
Joshi recommended ICICI
Prudential Balanced Advantage Fund and Nippon India Balanced Advantage Fund
These funds, which invest in a mix of debt and equity investments, alter their equity allocations based on market valuations
In such products, the equity component can vary from 0-to-100%, and they work well for investors unsure about market direction.
Joshi said
that aggressive investors with a time frame of 7-10 years could up their midcap equity allocation to 40% of their total equity
chief investment officer, Validus Wealth
Rajesh recommended Axis Midcap and Kotak Emerging Equity funds.
Analysts expect a strong set of earnings growth from mid-cap companies
The Nifty 50 market capitalisation has reached an all-time high, but the value of the Nifty Midcap 100 is 30% lower than its peak of
December 2017, says a report by Principal Mutual Fund
The report points out that the Nifty Midcap, which had traded at a premium to the Nifty, now trades at a discount
Its PE has corrected from 25.9 to 15.6, indicating there is value in midcap stocks.
Another report by Axis Securities points out that while
institutional ownership of Indian equities is at its peak valued at $700 billion, small and midcap ownership within institutional portfolios
has fallen by 600-700 bps to 14% from a peak of 20% in 2012.
Fund ScanBalanced advantage funds 1-year returns (%)Mid cap funds1-year returns
(%)Kotak BAF14.5Axis Midcap 18.43ICICI Prudential BAF13.17Motilal Oswal Midcap17.45Motilal Oswal Dynamic 13.16Tata Midcap12.63Invesco India
Dynamic Equity 12.86Kotak Emerging Equity 12.23Baroda Dynamic Equity 12.65DSP Midcap12.17