Volatile Markets? Survive through Diversification!

The first question that arises is What is volatility ? It is the regular change in the value of a particular asset which can be either in favor or against. Its one of the major factor which people are afraid of while making investment and a common tendency states that volatility will lead to fall or have negative impact on the investment. Case in the point is that such fluctuation take your investment up as well as down and the ones which never ever falls will never ever fly. Three major solutions to avoid or reduce the risk of volatility are as follows:

Long Duration Investments: This would give that extra cushion of time to your investment thereby reducing the impacts of small fluctuations.

SIP: Investments are made in different time cycles which end up with the benefit of cost averaging.

Diversification: The erratic moves in the equity markets, especially in the small caps are ignored when they are clubbed with other mid cap and large cap stocks to avoid.

ICICI Prudential Value Discovery Fund: Daily Chart              

ICICI Prudential Value discovery fund is an open ended diversified equity fund, which aims at stock which are available at a discount to their intrinsic value through a process of ‘discovery’ this process is called as Fundamental research. This process involves identifying companies that are well managed, fundamentally strong and are available at bargained price.

Top Holdings:

Company	PE	% Assets
Wipro	14.50	8.16
Larsen and Toubro	26.64	8.10
HDFC Bank	26.19	7.91
Sun Pharma	22.42	7.50
ICICI Bank	19.12	5.42

Sector Allocation:

Sector	%
Banking/Finance	19.10
I.T	17.25
Engineering	11.00
Pharmaceuticals	9.88
Automotive	9.77

Returns as on 29 March, 2017

Performance	Fund
1 Year	22.26
3 Year	23.90
5 Year	22.50

Risk Profile: The risk is moderate in this fund as the investment is diversified among various assets. Average returns can be expected from this fund as it is outperforming at current levels. Investors looking forward for good returns with moderate risk should consider this fund for investments in staggered fashion or through SIP route.

In a nutshell, corrective action in this fund looks to be more of time rather than price so investments in staggered fashion is advisable and SIP should turn out to be the best way as it will provide excellent cost averaging opportunities. 

Basically, you need a Financial Advisor to cope up and understand the concepts of Investing in a correct scheme at correct time. Have a look at the benefits of the same - 

Invest NOW in ICICI Prudential Value Discovery Fund online – Click here

A “DANGAL” against Inflation through Diversification!!

Investment depends upon three main factors age, risk tolerance, income streams etc. However the task is to determine which investment avenue will make wonder for you in future and help to beat the inflation rate. It is also essential to diversify because we have no way of knowing which ones will work for and which one will fall against us. In such cases diversification plays a key roles and one of the outperforming fund for 2017 is mentioned below.

L&T India Value Growth Fund is an open ended scheme launched in January 2009. This belongs to a Diversified category as the fund has exposure across Large cap, Midcap and Small cap. This fund is ranked 2 in Diversified category by Crisil.

L&T Value India Growth Fund – weekly chart

 

  

Portfolio Analysis: Top Holdings and Sector Allocation for this fund are shown below:

Risk Profile: This fund belongs to the high risk category given complete exposure only to equity. However, by way of SIP the risk can be reduced and also prudent asset allocation across different scheme including debt and balanced fund can provide optimum mix and reduce the risk. Also as we think long term trend for Nifty is on upside this fund offers good opportunity to ride the next wave of up move.

Investment Perspective: one can continue to invest in this fund in staggered fashion. We will highlight here when the ongoing correction is on verge of completion.

Invest NOW in L&T Value India Growth Fund online – Click here

Multiple Funds v/s Single Fund

Diversification of funds is one of the mainstreams why many people prefer to invest in mutual funds rather than any other avenue. It is advisable not to put all eggs in one basket because in case of defaults of a single stock then the harm is much more than if money is parked in different sectors. Diversification might reduce the return % but also the risk associated with the investment to a greater extent.

The below Info-graph explains why one should diversify –

Pic Courtesy – UTI Swatantra

Thus, diversify your investments by diversifying the Funds and get a Balanced Approach to your Portfolio!

Get a diversified Portfolio and eliminate the risk factor to the minimal possible fraction. Get more detailed strategies with expertise in Research and Monthly Account Statements and Online Log in for the same.

For more details, Click HERE

 

CONFUSED BETWEEN GROWTH FUND AND BALANCED FUND. GET YOUR ANSWER HERE

Growth fund and balance fund are 2 different schemes in Mutual fund sector. Both the schemes have different characteristic but are good investment option for the investors. In order to know which scheme one should choose it is necessary to understand both the scheme.

 

Both the Growth and Balance fund follows asset allocation approach i.e the fund manager who manages this funds invest in both equity and debt. 

However in growth fund large proportion of investment is made in equity, while in balance fund normally 60% of investment is made in equity and rest 40% in debt sector. However this proportion can change which depends on market condition. As in growth large amount of money is invested in equity it becomes more risky than balance fund. 

There is a myth among the people of “Higher the risk, Higher the return” although this myth is busted by balance fund as in past some balance fund have given better returns than growth fund and has been able to provide high return by taking moderate risk. 

So the question arises is in which fund one should invest in??? 

In order to get the answer one should know what is his/her risk appetite, goals, time horizon and other factors that affects investment discussion of an individual.

If a person can take high risk and wants to achieve his goals in short term period it is advisable to invest in Growth fund as this fund mainly invest in equity it as the potential to provide good return within short period of time along with high risk. However is a person what to take moderate risk and wants to achieve his investment goals in a long run then in such case it is advisable to invest in balance fund.

Both growth and balance fund is a good investment option one can start an SIP in both the fund and can gain good return. Also it is advisable to stay invested for long period say 5-7 year in order to generate good return from the investment.

So start your investments right here and get expert advisory based on your risk ratio appropriate for your portfolio. Click HERE