Latest news with #SagarShinde
Time of India
6 days ago
- Business
- Time of India
SBI's highest FD rate now falls to 6.7%. Are debt funds more attractive than ever now?
With SBI , the largest public sector lender, highest fixed deposit rate falling to 6.7% post repo rate and CRR cut by RBI and around 260 debt mutual funds outperforming it, mutual fund experts mention that debt mutual funds are now relatively well-positioned versus traditional fixed deposits—especially as FD rates continue to reset lower and with the RBI recently shifting its stance from accommodative to neutral, the room for further aggressive easing may be limited. 'This makes it a good time for investors to consider short duration funds for stability, and dynamic bond funds for flexibility to capture any residual fall in yields or rate volatility. Banking & PSU funds, which invest in high-quality issuers, remain a strong choice for conservative investors seeking safety with better returns & high liquidity,' Sagar Shinde, VP of Research at Fisdom shared with ETMutualFunds. Also Read | Flexi cap mutual funds dominate inflows for third straight month. Are investors seeking all-cap advantage? Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo 'However, with FDs offering guaranteed returns, investors don't need to choose one over the other—it's entirely feasible to have a blend of FD and debt funds depending on time horizon, risk profile & liquidity preference,' he further adds. SBI has reduced the interest rates on its special fixed deposit 'Amrit Vrishti' scheme while keeping the other regular fixed deposit rates unchanged and this revised rate is effective from June 15. The rate for public under 2 years to less than 3 years has been revised to 6.7% which is the highest among all revised rates. Live Events Reserve Bank of India in its last policy meeting reduced the repo rate by another 50 basis points to 5.50% and a 100 basis point CRR cut, marking it the third consecutive rate cut in the current calendar year and the second one in the current financial year. ETMutualFunds analyzed the two-year performance of all debt mutual fund categories alongside the interest rates on fixed deposits offered by SBI, India's largest public sector bank, in the same period. Around 260 debt mutual funds outperformed the bank deposit rate of 6.7% offered by SBI over the past two years. Four schemes gave double-digit returns, of which the top three performers were from the credit risk fund category. DSP Credit Risk Fund delivered the highest return of 19.1% over the last two years, followed by HSBC Credit Risk Fund and Aditya Birla SL Credit Risk Fund, which provided 13.7% and 11.9% returns respectively during the same period. Also Read | Nifty stuck in narrow range. Here's the mutual fund move you need to make now Aditya Birla SL Medium Term Plan delivered a return of 10.4%, followed by Invesco India Credit Risk Fund and 360 ONE Dynamic Bond Fund which gave 9.3% and 9.1% respectively in the same period. Motilal Oswal Liquid Fund was the last one to offer 6.8% return in the said period. After the outperformance by debt mutual funds, the expert mentions that in the current context of a likely pause in rate cuts and a neutral policy stance, investors should consider a barbell strategy—allocating to both short and dynamic duration categories. As the short duration funds help manage reinvestment and interest rate risk for near-term needs, while dynamic bond funds offer the opportunity to benefit if yields continue to drift lower or if volatility creates short-term mispricing, Shinde believes. 'Investors should prefer funds with high-quality portfolios, moderate duration, and reasonable YTMs. Since the direction of rates may now be more data-driven, staggered entries via SIPs or STPs can help mitigate timing risk,' Shinde recommends. FD vs debt funds Now coming to the comparison between fixed deposits and debt mutual funds, fixed deposits are considered low risk investments as they offer a guaranteed return for the predetermined period whereas debt mutual funds have a slightly higher risk associated with them because of the interest rate movement. The second point of difference comes on the taxation part. The investment in tax-saving fixed deposits is exempted under Section 80 C of the Income Tax Act whereas for the debt mutual funds there is no such exemption. But both fixed deposits and debt mutual funds are classified under the same asset class. As the fixed deposits offer lower interest rates compared to debt mutual funds, Shinde advises that investors in higher tax brackets, with a 1–5-year horizon, can consider diversifying beyond FDs into mutual funds and while debt funds and FDs now have similar tax treatment, mutual funds offer added benefits like no TDS, liquidity, and potential capital gains. 'Arbitrage funds can be more efficient for holding periods of one year or more, while income-plus-arbitrage funds tend to become more tax-efficient when held for over two years,' he recommends. Also Read | HDFC Flexi Cap Fund exits IndusInd Bank and HAL, adds Swiggy in May 'However, mutual funds come with risks not present in FDs. Debt funds can face interest rate, credit, and liquidity risks, and arbitrage strategies depend on market conditions for return generation. Instead of a full switch, a blended allocation—combining FDs, debt funds, and arbitrage-oriented categories—can help investors strike the right balance between stability, flexibility, and post-tax efficiency,' he further added. We considered all debt categories such as gilt fund, long duration, medium to long duration, gilt fund - constant maturity 10 year, credit risk funds, liquid funds, money market funds, overnight funds, corporate bond fund, dynamic bond fund, floating rate bond, banking and PSU funds, medium duration, low duration, short duration funds. We excluded debt based target maturity funds. We considered regular and growth options. We calculated returns for the last two years. We calculated CAGR returns as in debt mutual funds, returns up to one year are annualised and above one year are CAGR. Note, one should not make investment or redemption decisions based on the above exercise. One should always consider risk profile, investment horizon and goal before making investment decisions. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle
Time of India
09-06-2025
- Business
- Time of India
3 equity mutual fund categories lose up to 7% in 2025. Expert shares what went wrong
Technology based funds Live Events Pharma & Healthcare funds Small cap funds With these funds down from their 52-week high NAV, the important question that arises is whether one should go for these sectors now and for small caps should one consider this as an opportunity to invest more or wait for further correction? Way forward for these categories Technology based funds Pharma & Healthcare funds Small cap funds Three equity mutual fund categories lost the most of up to 7% in the current calendar years so far. There were around 22 categories in the said period, of which 11 were in red and 11 were in top three losers included Technology based funds, Pharma & Healthcare sector funds, and small cap funds which lost 7.45%, 5.41%, and 4.10% respectively in the said time period. The other eight lost between 0.19% to 1.95% in the same period. Technology funds on an average lost 7.45% in the current calendar year so far. There were 12 funds in the category, of which Tata Digital India Fund lost the most of around 12.25% in 2025 so far, followed by Kotak technology Fund which lost 9.55% in the same period. WOC Digital Bharat Fund lost the lowest of around 4.13% in the said time to an expert, the sector has seen a decline, primarily due to a combination of global tech fatigue and valuation concerns and after a sharp run-up in 2023, many IT stocks were trading at elevated valuations, which invited profit-booking.'Additionally, slower-than-expected recovery in enterprise tech spending in the US and Europe, coupled with cautious guidance from Indian IT majors, led to subdued investor sentiment,' Sagar Shinde, VP of Research at Fisdom shared with & Healthcare sector funds on an average lost 5.41% in the current calendar year so far. There were 17 funds in the category of which DSP Healthcare Fund lost the most of around 8.87%. Quant Healthcare Fund lost the lowest of around 1.90% in the similar time is of the opinion that the sector got impacted by a mix of global and local challenges and US generic pricing remains under pressure, while recent tariff developments by the US government — including potential hikes on pharmaceutical imports — have raised concerns for Indian drug cap funds on an average lost 4.10% in 2025 so far. Out of 29 funds in the category, LIC MF Small Cap Fund lost the most of around 12.31% in the same period. HSBC Small Cap Fund lost 8.24% in the same Pru Smallcap Fund lost the lowest of around 0.17% in 2025 so far. Only Quantum Small Cap Fund offered positive returns in the said time small cap segment can be extremely volatile in the short term, but they have the potential to offer very high returns over a long period has been in the red zone in 2025 largely due to muted corporate earnings and valuation fatigue and after a strong rally in 2023 and 2024, small-cap stocks had run ahead of fundamentals, leading to elevated expert also shared with ETMutualFunds that in the recent earnings season, many small-cap companies reported weaker-than-expected numbers, especially in sectors like textiles, chemicals etc — impacted by sluggish demand and margin pressures which triggered profit-booking, as investors became more selective and cautious about overvalued pockets within the small-cap universe. Additionally, limited institutional buying and waning retail enthusiasm have also contributed to the weakness, Shinde analysis of NAV of the funds in these categories showed that they are down between 2-16% from their 52-week high NAVs except for Mirae Asset Small Cap Fund. The fund was launched in January 2025 and hit its 52-week high NAV on June 6 addressing this, Shinde answers that in the technology sector, it's better to wait as the sector is still facing margin and demand pressures, and any recovery may take time and the exposure is best taken through diversified equity funds rather than pure tech funds.'In pharma, recent corrections have created improved entry points. Long-term structural drivers remain intact, and staggered investments can be considered. In small caps, while valuations have moderated, earnings delivery remains patchy. A phased approach via SIPs into quality-oriented small-cap funds is advisable rather than aggressive lump sum investments, Shinde shared the recommendation with also checked how these categories have performed in the last two calendar years i.e. 2023 and 2024 to know how the categories are expected to perform in 2023 and 2024, tech funds gave an average return of 34.21% and 26.76% respectively. Shinde adds that these funds have cautious near-term outlook as global IT spending remains soft and margin pressures continue and a meaningful recovery may be gradual, especially in large deal flows and discretionary tech spends. 'Stick to diversified mutual funds for now rather than going overweight on sector-specific tech funds. Monitor the H2 outlook for potential re-entry, especially if deal momentum picks up or valuation resets become attractive,' he & healthcare funds offered an average return of 35.96% and 40.03% in 2023 and 2024 respectively. For these funds, Shinde shares that the outlook is neutral to positive overall, but very constructive on hospitals and specialty pharma segments and while the US pricing pressure remains a concern, domestic demand, growth in chronic therapies, and export diversification are cap funds offered an average return of 41.08% and 26.38% in 2023 and 2024 respectively. The expert believes that the outlook for small cap funds is moderately positive and the space has seen a healthy valuation correction, but earnings delivery will be key. 'As India's capex, infrastructure, and manufacturing cycles gain traction, select small-cap companies stand to benefit. However, dispersion within the segment is high, making active management and bottom-up stock selection critical. A disciplined, SIP-based approach is advisable,' Shinde should always consider their risk appetite, investment horizon and goals before making any investment decision.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
06-06-2025
- Business
- Time of India
RBI slashes rates by 50 bps: What it means for debt mutual fund investors
The MPC shifted its policy stance from 'Accommodative' to 'Neutral,' RBI Governor Sanjay Malhotra announced in his monetary policy speech. He also revealed that the MPC decided to reduce the Cash Reserve Ratio (CRR) by 100 basis points, lowering it from 4% to 3%. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads After the Reserve Bank of India reduced the repo rate by another 50 basis points to 5.50% and a 100 basis point CRR cut, the mutual fund experts believe that the fixed income landscape has turned even more favorable for investors. Further, the CRR cut is a strong liquidity injection, which will further push down short-end rates and improve system-wide liquidity.'While duration strategies like gilt, long-duration, and dynamic bond funds remain relevant, the combination of already-priced-in rate cuts (via the OIS curve) and surplus liquidity suggests that returns from duration could moderate going forward,' Sagar Shinde, VP of Research at Fisdom shared with ETMutualFunds.'Therefore, a balanced allocation across both long-duration funds and 2–3-year high-quality accrual strategies (like banking & PSU or short-duration funds) is prudent. Categories that benefit from declining short-end yields and tight credit spreads may perform well in this environment,' he further is the third consecutive rate cut by the RBI in the current calendar year and the second one in the current financial year. This marks the third consecutive cut under Governor Malhotra. In February and April, the apex bank had reduced the repo rate by 25 basis points each. Before this, the repo rate was held at 6.5% for 11 consecutive addition, the MPC changed its policy stance from 'Accommodative' to 'Neutral', RBI Governor Sanjay Malhotra announced in his monetary policy speech. RBI Governor also announced that the MPC decided to cut the Cash Reserve Ratio (CRR) by 100 basis points (bps) to 3% from 4% earlier.'The near-term and medium-term outlook now gives us the confidence of not only a durable alignment of headline inflation with the target of 4 per cent, as exuded in the last meeting but also the belief that during the year, it is likely to undershoot the target at the margin.,' said the RBI Governor, Sanjay to the expert, the combination of a 50-bps rate cut, a neutral stance, and a 100 bps CRR cut signals that the RBI is focused on boosting transmission and improving liquidity across the curve and with surplus liquidity already in place and now further enhanced, short-term rates could stay depressed, benefiting accrual strategies at the short end.'Simultaneously, there's scope for some mark-to-market gains in longer-duration strategies, though the forward OIS curve already factors in much of the easing. Hence, a barbell approach—mixing duration (to capture any residual rally) and short- to medium-term accrual strategies (to harness steady income from high-quality credit)—is best suited for this phase of the cycle,' Shinde further shares with Governor in his policy statement mentioned that, 'On the financing side in 2024-25, foreign portfolio investment (FPI) to India dropped sharply to 1.7 billion US$, as foreign portfolio investors booked profits in equities. Net foreign direct investment (FDI) too moderated'Shinde thinks that the 100 bps CRR cut, on top of the rate cut and stance shift, enhances liquidity across the curve and keeps a lid on yields, particularly at the shorter end.'While longer-term investors (3–5+ years) can still benefit from duration strategies, the limited headroom for further rate cuts suggests that short- to medium-term accrual strategies also deserve meaningful allocation. Investors should adopt a laddered horizon, combining both short (2–3 year) and long (5+ year) maturity strategies, to optimize for both income and capital appreciation while managing reinvestment and duration risks in a fully liquid market environment,' Shinde should always choose a scheme based on risk appetite, investment horizon, and goals.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Time of India
27-05-2025
- Business
- Time of India
Nifty up 13% from April's low. How should mutual fund investors alter their investment strategy?
With the benchmark index Nifty 50 up nearly 13% from April's low and touching 25,001 on Monday, market experts note that while many investors may consider profit booking, mutual fund investors, particularly those with a long-term outlook, are advised to stay invested. The recent highs reflect strong underlying earnings growth, supportive macro factors, and positive investor sentiment, rather than a signal to exit. 'Timing the market is challenging, and exiting prematurely could mean missing out on further upside or the power of compounding. That said, investors should use this opportunity to review their asset allocation and rebalance if their equity exposure has gone significantly above their target levels. Booking partial profits and reallocating to underweight asset classes, such as debt or gold, could be considered purely from an asset allocation standpoint—not as a reaction to the index level,' said Sagar Shinde, VP Research, Fisdom. Also Read | Nifty still below peak, but why are these mutual funds at record-high NAVs? Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 3BHK Transformation Possible for ₹4.5 Lakh? HomeLane Get Quote Undo Another expert advocates the same opinion that unless one has short-term financial needs or the portfolio has deviated significantly from the defined asset allocation targets, staying invested is the wiser choice for long-term wealth creation, as the Indian economy remains on a strong footing, supported by robust earnings, government reforms, and macroeconomic stability. 'For long-term investors, trying to time the market based on index levels often results in missed opportunities. Instead of exiting the market entirely, consider rebalancing your portfolio—trim some exposure in overvalued sectors or schemes and reallocate towards laggards or more balanced options if needed. This allows you to capture gains while keeping your investments aligned with your financial goals,' recommends Adhil Shetty, CEO of Live Events The index stood at 22,161.6 on April 7, marking the lowest level in the current financial year so far. Over the past three months, it has risen by 10.22%, while its six-month gain stands at 2.60%. The Nifty 50 has gained 8.25% over the last year and 5.11% so far in the current calendar year. Nifty50 touched its 52-week high level on September 27, 2024 of 26,277 and is currently down by nearly 5% from its 52-week high level. As the benchmark index rises, experts recommend that investors continue their SIPs but exercise caution with lump-sum investments, advising them to stagger these investments over time. Shetty of Bankbazaar recommends that SIP (Systematic Investment Plan) investors should continue their regular contributions regardless of market levels as SIPs are designed to eliminate the need for market timing by investing a fixed amount at regular intervals, which helps average out the cost of units over time and this approach works particularly well during volatile or high market phases, as it ensures discipline and allows investors to benefit from market corrections through rupee cost averaging. 'On the other hand, investors with lump-sum amounts should be cautious when the market is at all-time highs. Rather than deploying the full amount at once, consider a staggered investment strategy—spread the investment over 3 to 6 months or even longer through Systematic Transfer Plans (STPs) into an equity fund. Alternatively, deploying the lump sum can offer exposure to equities while managing downside risks. This measured approach helps reduce regret from potential short-term corrections and aligns better with long-term wealth-building goals,' he added. Also Read | 30 equity mutual funds multiply lumpsum investments by over 2 times in 3 years To continue with the SIPs in the current market scenario, Shinde adds that lump-sum investors, however, should adopt a staggered approach as deploying the entire amount at current levels could expose them to short-term volatility. 'A Systematic Transfer Plan (STP)—where the lump sum is parked in a liquid or ultra-short duration fund and gradually moved into equities—can be an effective method to mitigate timing risks. Alternatively, if the investor has a medium- to long-term horizon, partial deployment in balanced advantage or multi-asset funds can serve as a middle ground, offering market participation with downside buffers,' Shinde adds. ETMutualFunds looked at the performance of equity mutual fund categories since the April low and found that out of 21 categories, 19 offered double-digit average returns and two gave single-digit returns in the same time frame. Since April 7, the Auto sector based funds offered the highest average return of 18.30%, followed by technology based funds which gave 17.04% average return in the same period. International funds gave 16.07% and infrastructure funds gave 14.86% average return in the same period. Midcap and smallcap funds gave 14.82% and 14.71% respectively since April's low level. Contra and largecap funds were last in the list of double-digit gainers. The categories gave 11.77% and 11.22% respectively in the mentioned period. Consumption based funds and pharma and healthcare funds gave 9.83% and 8.50% average returns respectively in the mentioned period. Post the categories gaining in double-digits and market above 25,000 mark, Shinde advices investors fresh investments at market highs should be made with a margin of safety and diversification in mind and for new investors, it's important not to shy away from equity markets entirely—rather, the focus should be on how and where to deploy capital. Also Read | Planning to invest Rs 10 lakh for up to 2 years? Shiv Gupta of Sanctum Wealth recommends this 'Conservative hybrid funds or balanced advantage funds (BAFs) offer a prudent starting point. These funds dynamically manage equity exposure based on valuations and volatility, making them ideal for entry during elevated market levels' 'Flexi-cap and multi-cap funds are also well-suited for long-term investors due to their allocation flexibility across market capitalisations. For global diversification, international funds—especially those focused on US or developed markets—are also attractive, given their recent rebound and long-term growth potential. In short, invest, but do it with a category that aligns with your risk appetite & time horizons,' he further added. On the similar lines, Shetty advices that quality-focused index funds that invest in fundamentally strong companies can offer consistent returns with relatively lower risk and the key is to match the investment horizon and risk tolerance with the right fund category and investing through SIPs or staggering the investment through STPs (Systematic Transfer Plans) can further reduce timing-related risks. 'Investing at market highs requires a disciplined and cautious approach, especially for new investors who may be concerned about near-term corrections. Rather than shying away from investing altogether, new entrants can consider fund categories that offer built-in risk mitigation and asset allocation flexibility. Quality-focused index funds that invest in fundamentally strong companies can offer consistent returns with relatively lower risk. The key is to match your investment horizon and risk tolerance with the right fund category. Investing through SIPs or staggering the investment through STPs (Systematic Transfer Plans) can further reduce timing-related risks,' the CEO of Bankbazaar advised. One should always consider risk appetite, investment horizon, and goals before making investment decisions. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Economic Times
13-05-2025
- Business
- Economic Times
Largecap mutual funds gain investor interest, inflows surge by 8% in April
Amid market volatility, large-cap mutual funds experienced an 8% surge in April inflows, reaching ₹2,671 crore, driven by investor preference for stability. Amid the heightened market volatility and global uncertainties, investors appear to be favouring the stability and resilience offered by largecap mutual funds as the category witnessed a surge of 8% in monthly category received total inflows of Rs 2,671 crore in April against an inflow of Rs 2,479 crore in March, by becoming the only category among diversified mutual funds to witness surge in inflows. On a yearly basis, the category saw a jump of 647% in the inflows, the highest among all diversified equity categories. The category received an inflow of Rs 357 crore in April 2024. Apart from diversified mutual fund categories, sectoral and thematic funds saw a jump of 1,076% in the monthly inflows. Also Read | India-Pakistan Tensions: How should mutual fund investors respond to navigate geopolitical risk? The experts attribute this month-on-month jump to safety and stability which large cap mutual funds provide in the volatile market as their higher liquidity and lower volatility make them a preferred choice when investors become cautious. 'This is mainly driven by a shift in investor sentiment towards safety and stability. Large-cap funds, which focus on blue-chip companies, are perceived as more resilient during volatile or uncertain market conditions. Their higher liquidity and lower volatility make them a preferred choice when investors become cautious,' said Hrishikesh Palve, Director, Anand Rathi Wealth. Another expert says that the large cap funds are attracting inflows due to their relative stability, better corporate earnings, and more attractive valuations compared to mid and small-caps. 'These factors, along with global uncertainties, have led investors to prefer the safety and visibility offered by large-cap companies, while other diversified categories have seen a month-on-month moderation in flows amid valuation concerns and profit booking,' said Sagar Shinde, VP of Research at a monthly basis, the other diversified equity mutual funds saw drops ranging between 1% to 151%. ELSS or tax-saving mutual funds saw a drop of 151% as the category witnessed an outflow of Rs 372 crore in April against an inflow of Rs 735 crore in March. Flexi cap funds, the category which received the highest inflow in April of Rs 5,541 crore, saw a decline of 1% on monthly basis from an inflow of Rs 5,615 crore in March. Also Read | HDFC Defence Fund increases stake in HAL, Solar Industries, and 4 other stocks in April A deep dive into the data of inflows by Association of Mutual Funds in India (AMFI) showed that in March, large cap funds was the only category among diversified mutual fund categories to see a drop in monthly responses. In March, the inflows dropped by 13% from an inflow of Rs 2,866 crore in February to Rs 2,479 crore in firmly believes that this 8% month on month surge likely reflects a shift in sentiment toward safer, more predictable equity segments and he also recommended that in the current market environment, increasing allocation to large caps can be a prudent move, especially for conservative investors or those looking to rebalance portfolios after strong gains in riskier the category witnesses a surge in inflows, Palve believes that in the times of heightened market volatility, it is very common for investors to move towards stable categories such as large-cap, as these categories offer stability & reduce overall portfolio volatility during turbulent also recommends that it is recommended for investors to build a strategy-based portfolio by diversifying the portfolio across the categories, such as market-cap-based funds and strategy-based funds, such as focused and value funds, as these will help to maintain stability and reduce overall portfolio volatility and additionally, it is recommended to follow a market cap mix of 55:22:23 across large, mid, and small caps. In April, the large cap funds offered an average return of 4.35% with Invesco India Largecap Fund being the topper which delivered 6.30% return in the same period. Samco Large Cap Fund lost the most of around 0.51% in the same period. On the other hand, mid cap and small cap funds gave an average return of around 3.81% and 2.01% respectively in April. In March, mid cap funds topped the average return chart among these three categories and gave an average return of 7.74%, followed by small cap funds which gave an average return of 7.66% and then large cap funds which gave an average return of 6.73% in the same period. Also Read | Defence ETFs gain up to 7% in two weeks amid India-Pakistan tensions With the category attracting more inflows, Shinde is of the opinion that while some of the inflows may be driven by near-term macro uncertainty, the trend could sustain if market volatility persists and the outlook for large-cap funds remains constructive, backed by steady earnings growth and valuation comfort relative to mid and looking at the performance and inflows, Palve is of the opinion that the shift is likely to be temporary, and it is mainly driven by a series of global uncertainties such as U.S. elections, tariff tensions, Russia-Ukraine war escalations, and Indo-Pak geopolitical tensions and historically, markets have shown resilience, with long-term performance driven more by corporate earnings and valuations than by short-term geopolitical shocks.'Going forward, we are seeing the large-cap category grow at 12 to 13% CAGR. Currently, the valuations are reasonably placed with negative froth; however, it is not recommended to invest solely in a single market cap or category. Investors should diversify across the market caps with a market cap mix of 55:22:23 across large, mid, and small caps,' he funds invest at least 80% of their assets in a large-cap company which is ranked from 1st to 100th on the Indian stock exchanges in terms of market capitalisation, with the flexibility to invest the balance 20% in other companies as per the discretion of the fund manager. If you are looking for recommendations, see: Best large cap mutual funds to invest in May 2025 (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ along with your age, risk profile, and Twitter handle.
