Which mutual fund is suitable for fresh investors in falling stock market
2 min read . Updated: 24 Dec 2022, 08:56 AM IST
Premium- Hybrid mutual funds funds try to time the market using parameters like valuation, momentum etc
After climbing to life-time high on 1st December 2022, bears have taken full hold on Dalal Street leading to big hit on the mutual fund portfolio of equity investors. Though, the current slump won't have much impact ion long term mutual fund SIP investors, fresh investors might feel confused as to which kind of investment tool would be suitable for higher returns.
According to investment experts, those fresh investors who were waiting for the market to plunge from record high, they have a good option to chip in via hybrid route or through balanced advantage funds. However, they said that a hybrid fund tries to time the markets and hence fresh investor should not put entire money in one shot. Experts advised investors to invest in hybrid mutual funds in staggered way by dividing one's money in 6-12 parts.
Speaking on how hybrid funds are suitable for fresh investors in a falling market, Sahil Kapoor, CFA Product Manager at IIFL Wealth said, "Investor should be driven by their long term strategic Asset allocation. Small deviation from their strategic allocation is warranted given the markets are richly valued but market timing is not easy. Hybrid funds try to time the market using parameters like valuation, momentum etc."
Advising medium to long term mutual fund SIP investors to continue investing, Abhishek Dev, Co-Founder and CEO at Epsilon Money Mart said, "We suggest that existing investors continue with their investments if it is for fulfilling any goals in medium to long term horizon."
Abhishek Dev advised fresh investors to look at hybrid mutual funds citing, "New investors who were waiting for markets to fall to take a plunge in the markets, taking the hybrid route could do well."
Asked about the hybrid mutual funds that one can look at for investing, Abhishek Dev of Epsilon Money Mart said, "Investors can track Hybrid funds like: ICICI Pru Equity & Debt fund and Kotak Equity Hybrid fund or Balanced Advantage funds like: HDFC Balanced Advantage funds."
Unveiling investment strategy in hybrid mutual funds in a falling market, Sahil Kapoor of IIFL Wealth said, "A new investor may be better of by stagger her/his investment over the next 6 to 12 month and slowly build towards her/his strategic asset allocation."
Disclaimer: The views and recommendations made above are those of individual analysts or broking/financial companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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