Take a look at the performance of equity mutual fund categories in the last one month. You would notice that most equity mutual fund categories have offered positive returns in the last one month. Banking fund category has offered around 7% in the last month. The PSU fund category offered around 6%, while the pharmaceutical category offered around 5% in the same period. Most other categories like large cap, large & mid cap, mid cap, small cap, among others have offered around 4% in the last month. Simply put, the equity mutual funds are reflecting signs of positivity that’s spreading in the stock market.
Many mutual fund managers and advisors believe that the Indian stocks have become attractive after the recent slump in the market. Many investors believe that equities, across different market segments, have become extremely attractive from the point of view of long term investors. Many advisors are recommending mid cap and small cap schemes to their clients, as they believe that these segments have become attractive because of better valuations.
This is not to say that the market is going to scale new highs every other day. Global markets are still under the threat of higher interest rates and possible recession. Even in India the future course of RBI action is still not clear. Sure, the banking regulator held rates in the last policy review. However, no market participant is sure how long it will pause or when it will again start hiking rates or when it will eventually start cutting rates. In short, the uncertainty is continuing but most investment advisers believe that the market may start moving up again and it may be the right time to get in. If you’re sitting on surplus cash, you can deploy it now. Or part of it.
If you are interested to invest, you can choose your mutual funds based on your goals, horizons, and risk profile. For conservative investors, large cap funds are ideal. Moderate investors can choose flexi cap funds. Aggressive investors can invest in mid cap and small cap schemes.
