Though the fund has done well over past five years, the investors must be prepared to tolerate short-term under performance in case there is a sudden rally that overlooks fundamentals .
Investment strategy
The scheme has invested in a concentrated portfolio of around 25 stocks. The stocks are picked up on a bottom-up basis. The fund manager identifies investment opportunities that would deliver over a five-year time frame. “We don’t put much emphasis on the macro environment and the associated factors since they are not predictable and not within anyone’s control.
Should you invest now?
The scheme’s portfolio has cut its net exposure to Indian stocks over past two years. Compared to 62 percent in September 2016, it came down to 55 percent in September 2017 and to 45 percent now, in line with rising valuations of quality companies. High cash levels and exposure to overseas stocks have helped the fund to weather recent sharp correction in Indian stocks. If markets remain weak the fund manager may get more investment opportunities in terms of bargain deals in quality stocks.
Expert takeaway
While explaining the investment strategy of the scheme, Vidya Bala, head of mutual fund research, Funds India says,“Fund has a strategy of investing some portion in international stocks and this has delivered well in a volatile domestic scenario in 2018. The fund goes behind value wherever it is available.”
How to invest?
Investors must take a five-year view on this scheme. The best way to invest could be through a systematic transfer plan or a systematic investment plan. Though the fund has done well over past five years, the investors must be prepared to tolerate short-term under performance in case there is a sudden rally that overlooks fundamentals.
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