New Delhi, Jan 4 (Agency) With markets remaining volatile as we enter the New Year and sector rotation likely to happen in the market where should retail investors invest to gain the most from current market conditions. According to a report in the Economic Times, experts recommend retail investors to add large-and-midcap schemes and gold ETFs in their portfolios. “The present rally in the market is broader than the previous one. It will cover not only well-placed large companies but also midsized companies. It is therefore important to add a large-and-midcap scheme to the portfolio,” Rupesh Bhansali, head of mutual funds, GEPL Capital, told the business daily.
Financial planners such as Harshvardhan Roongta, CFP, Roongta Securities, are advising clients to include balanced advantage schemes apart from large-and-midcap schemes. “We are entering a peculiar situation wherein most triggers for the rally are reflected in prices. Now, it is important to look at companies which have the strength of balance sheet, brand and size of operations,” the publication quoted Roongta as saying. Within the large-and-midcap category, the schemes that are highly recommended by distributors are Invesco India Growth (value and growth, large and midcap focused companies), Canara Robeco Emerging Equities (midcap focused) and Kotak Equity Opportunities (growth-oriented, large and midcap focused stocks). Canara Robeco Emerging Equities fund delivered 25% return in the last one year while 3-year and 5-year CAGR of the fund has been 7.35% and 13.82% respectively. Meanwhile, Kotak Equity Opportunities Fund and Invesco India Growth Opp Fund have delivered 17.19% and 13.81% respectively in the last one year. 3-year and 5-year CAGR of these funds have been 8.01%, 12.95% and 8.13%, 12.56% respectively.
Experts also recommend exposure to gold through exchange-traded funds (ETFs). Chirag Mehta, senior fund manager-alternative investments at Quantum Mutual Fund in his Gold Outlook for 2021 said, “We expect interest rates in the US as well as the rest of the Western hemisphere to be low for a longer time. This makes holding gold a more viable option than holding US treasuries as it successfully preserves purchasing power in a negative real rate environment.” He believes the precious metal will be more effective than bonds in mitigating equity market risks by providing portfolio diversification. Financial planners recommend gold ETFs with good liquidity including Nippon India ETF Gold BeES, UTI Gold ETF and HDFC Gold ETF.