Prashant Mahesh

Indian investors are increasingly looking overseas as global markets outperform domestic equities, driven by themes like AI. While international mutual funds are a simple route, they face utilization limits. Alternative options include GIFT City-based funds and direct investing via international brokerage accounts, each with its own process and costs.

Two years of challenging equity market returns appear to be prompting a section of retail investors to reassess exposure to the stock market, with industry data showing rising monthly systematic investment plan (SIP) discontinuations and a slowdown in new investor additions.

Challenging equity market returns are prompting retail investors to reassess their stock market exposure. Industry data reveals a rise in systematic investment plan (SIP) discontinuations and a slowdown in new investor additions. This trend indicates investor disappointment with lower-than-expected returns. The situation highlights a shift in investor sentiment amid market conditions.

The RBI maintained its repo rate at 5.25% and a neutral stance, raising inflation forecasts due to West Asian conflict-driven oil price hikes. Fund managers suggest corporate bonds for accrual income and a tactical bet on long-tenure gilt funds, anticipating improved FPI inflows after tax benefits.

Three major asset management companies have imposed purchase restrictions on large investors in gold mutual fund schemes. This move aims to curb gold imports and manage strong inflows, with retail investors expected to remain unaffected. Wealth managers see this as a response to the Prime Minister's call to reduce imports, following gold's significant recent performance.

Understanding mutual fund performance goes beyond just returns. A benchmark, like Nifty 50 or Sensex, acts as a crucial yardstick to gauge a fund's success. Investors should look for funds consistently outperforming their benchmark, even by a small margin, over extended periods and across market cycles. This comparison is vital for making informed investment decisions.

Affluent investors are increasingly turning to newly launched hybrid specialised investment funds (SIFs) for their tax efficiency and better returns than traditional fixed-income options. These funds, blending debt, equity, and derivatives, have attracted significant assets, with hybrid strategies dominating. Their appeal lies in equity taxation benefits and lower volatility, offering attractive post-tax returns for wealthy individuals and family offices.

Unsure if your fund manager is truly active? Active share reveals how much a mutual fund's portfolio deviates from its benchmark index. A low active share might mean paying active fees for index-like performance. Understanding this metric helps investors identify genuine active management and avoid 'closet index funds,' potentially leading to better investment decisions.

Indian stock markets have seen a flat performance recently, but historical data suggests this could be a precursor to stronger gains. A study indicates that after similar periods of stagnation, the Nifty has historically delivered robust returns over one and three-year horizons. Fund managers believe large-cap stocks, now trading at attractive valuations, offer a favorable risk-reward profile for patient investors.

Investors seeking a balanced approach to wealth creation are increasingly favoring portfolios that blend equities with debt. A recent study highlights that a 70% equity, 30% debt mix, with strategic rebalancing, yielded impressive returns with significantly lower volatility compared to an all-equity index. This strategy helps investors remain invested through market ups and downs, offering a more stable investment journey.