Nifty slips into consolidation: What is the right strategy for mutual fund investors now?
With the benchmark index - Nifty50 entering a consolidation phase after witnessing a rally in the first half of the year and making mutual fund investors wondering whether to go for SIP , lumpsum or wait, market experts recommends that this is a good time to continue or even increase the SIPs, especially if your income has grown as SIPs work best during volatile or sideways markets, helping you accumulate more units at lower NAVs.'If you have surplus funds, avoid deploying them all at once in equities, especially amid ongoing global uncertainties. A better approach is to stagger lump-sum investments using Systematic Transfer Plans (STPs) from a liquid or low-duration debt fund into equity funds over 6-12 months,' Vishal Dhawan, CEO of Plan Ahead Wealth Advisors, a wealth management firm in Mumbai, shared with ETMutualFunds.Another expert in addition to this mentioned that SIPs are the perfect route to take market exposure without worrying about the risk of market timing.'SIPs are the perfect route to take market exposure without worrying about the risk of market timing. Investors should continue with their SIPs as trying to time the market more often than not results in poor portfolio outcomes,' Kaustubh Belapurkar, Director - Manager Research, Morningstar Investment Research India told ETMutualFunds.In the first half of the current calendar year, Nifty50 went up by 7.47%. In July 2025, the index corrected 3% and closed at a level of 24,768 on July 31 against a close of 25,541 on July 1. On July 28, the benchmark closed at a level of 24,680As Nifty went down by 3% in July, Dhawan recommends that for investors using the SIP route, such market dips are actually advantageous, as they allow accumulation of more units at lower NAVs through rupee cost averaging and minor corrections like this should not be a reason to pause or alter SIPs as equity mutual fund investments are designed for long-term wealth creation.During this consolidation phase, portfolio allocation should always be guided by the investor's risk appetite and financial goals is what Dhawan believes and also recommends that for an investor with a moderate risk profile, a well-balanced allocation could be a combination of equity mutual funds (large-cap, flexi-cap, and international funds), hybrid funds, including categories like balanced advantage, some debt funds for capital preservation and stability, and a small exposure in commodities such as gold and silver, which offer a hedge during a market crisis.Market experts always recommend that investors should always invest according to their risk appetite, investment horizon, and financial goals as no two investors have the same goals, investment horizon, and risk tolerance capacity.Echoing a similar opinion, Belapurkar recommends that investors need to continue following a disciplined asset allocation approach and each investor's asset allocation is unique, which is driven by their risk return objectives and investment time horizon so if their current portfolio allocation is misaligned from their strategic asset allocation, it would be a good time to realign their portfolios.There are various options available among equity and equity oriented funds which provide stability to investors during the volatile market. Mostly, large-cap mutual funds and flexi-cap funds are considered more suitable by market experts during this phase whereas on the hybrid side, balanced advantage, multi asset allocation, and dynamic asset allocation funds are considered suitable.According to Belapurkar, investors should continue to invest in a judicious mix of funds investing across the capitalization curve, with a core holding in large and flexi caps funds and he has also observed that many investors are significantly overallocated to small and mid cap funds due to the rally in these stocks since covid, therefore it would be prudent to prune exposure in these segments to strategic asset allocation levels depending on their individual risk tolerance and investment time horizon.On the other hand, Dhawan lists hybrid fund categories as well where investors can consider investing during this volatile or consolidation period. He shares categories where investors should make investments and where they should reduce allocation.Firstly, during periods of market consolidation , investors can consider hybrid fund categories such as balanced advantage funds or multi-asset funds, which dynamically manage equity, debt, and sometimes commodities like gold for lumpsums, Dhawan recommended.The next he lists banking and financial services funds as a suitable option for investment as the sector currently appears attractive and has underperformed in the recent rally due to concerns around credit-deposit growth divergence, softening net interest margins, and asset quality pressures.'These headwinds may ease soon, with the RBI's supportive liquidity stance and strong macroeconomic conditions offering a positive outlook. With banking sector valuations below historical averages, it may be a good time for investors to consider banking and financial services funds for a balance of stability and growth,' Dhawan recommended.While cautioning investors on sectoral, mid cap, and small cap funds, Dhawan said that sectoral funds carry concentrated risks and are best suited only for seasoned investors and we do not recommend allocating more than 5-10% of one's total mutual fund portfolio to any single sectoral fund and lastly investors should exercise caution with small-cap and mid-cap mutual funds as these segments have witnessed a sharp rally over the past few quarters, leading many portfolios to become overweight relative to their original asset allocation and reducing exposure in these two categories is recommended.In July, among the diversified equity categories, flexi cap funds lost 1.94% and the multi cap funds lost 1.76%.Going forward, the expert from Plan Ahead Wealth Advisors believes that valuations across Indian equities remain elevated compared to historical averages, especially in the midcap and smallcap segments, which have seen sharp rallies in recent quarters and given this backdrop, large-cap stocks and defensive sectors may offer more favourable risk-adjusted returns, particularly if market volatility increases.Global risks, including geopolitical tensions and the trajectory of US Federal Reserve policy, alongside domestic events such as state elections, may lead to intermittent corrections—potentially creating entry points for long-term investors and with inflation showing signs of stability, short-to-medium duration debt funds are better positioned to benefit from the current rate cycle, offering a balanced combination of yield and lower interest rate sensitivity.One should always consider risk appetite, investment horizon, and goals before making any investment decisions.: 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@timesinternet.in alongwith your age, risk profile, and Twitter handle.
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Economic Times
10 hours ago
- Economic Times
Nifty consolidates below resistance, key supports hold amid cautious outlook
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of .) The markets showed a firm undertone in the truncated trading week as they ended on a positive note after snapping a six-week losing streak. Nifty remained within a relatively narrow range, oscillating between 24,347 and 24,702, showing a weekly trading range of just 355 points. Despite a shortened week due to the Independence Day holiday on Friday, the Index posted a gain of 268 points or 1.10%. India VIX, which gauges volatility, rose modestly by 2.68% to 12.35, indicating a slightly heightened risk perception but still remaining comfortably broader structure suggests that Nifty is currently moving in a range-bound fashion, facing overhead pressure from the falling trendline resistance that extends from the alltime highs. While the Index has managed to stay above its key short-term moving averages, the overall structure remains that of a non-trending market for now. The ongoing consolidation just below the resistance zone of 24,800–25,000 reflects a cautious yet resilient undertone. A decisive move above this zone may reignite upward momentum, while any drift below 24,200 could intensify selling the current setup, Nifty may see a tepid start to the coming week. The immediate support is placed at 24,200, followed by stronger support near 23,880. On the higher side, resistance exists at 24,800 and then at 25000. Unless the Index breaks above this resistance zone with strong volumes, any upside may remain weekly RSI stands at 52.50; it remains neutral and does not show any divergence against the price. The RSI suggests the market is neither overbought nor oversold. The weekly MACD remains below its signal line, reflecting continued lack of positive a pattern analysis standpoint, the Nifty remains below a falling trendline drawn from recent highs, which is acting as stiff resistance. While the Index is still trading above its 50-week and 100-week moving averages (24,191 and 23,148, respectively), the lack of strength to challenge the falling trendline indicates a pause in bullish momentum. The broader uptrend remains intact as long as the Index holds above its 50- week average, but for now, the absence of a fresh breakout keeps the trend vulnerable to the coming week, a cautious and stock-specific approach is advised. With the Index still consolidating below key resistance levels and no breakout confirmation, aggressive buying should be avoided. Traders would do well to protect gains and closely monitor the 24,200 level as a key support. A measured and vigilant approach with strict stop losses would be the best way to navigate the week our look at Relative Rotation Graphs®, we compared various sectors against the CNX500 (NIFTY 500 Index), representing over 95% of the free-float market cap of all the listed Rotation Graphs (RRG) show that the Auto Index has rolled inside the leading quadrant and is showing improved relative momentum along with the Infrastructure Index, which is also placed in this Nifty Media, Realty, Metal, PSE, PSU Bank, Midcap 100, and Energy Indices are also inside the leading quadrant. All these indices are showing sharp paring of relative momentum against the broader markets. Their relative performance may slightly diminish because of Nifty Financial Services and Nifty Bank Index show improving relative momentum while staying inside the weakening Nifty Services sector Index continues to show sharp improvement in its relative momentum, along with the FMCG Index, while being inside the lagging quadrant. Besides this, the Consumption and the Commodities Indices continue to languish inside the lagging Nifty Pharma and the IT Index are placed inside the improving quadrant. Given their trajectory of rotation, they are expected to continue to improve their relative performance against the broader Note: RRG™ charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of and and is based in Vadodara. He can be reached at : Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Mint
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- Mint
GST reforms, Putin-Trump meeting to US Fed rate cut: Top five factors that may dictate Indian stock market next week
Indian stock market next week: The Indian stock market finally snapped a six-week losing streak as extreme oversold conditions and supportive global cues lifted investor sentiment. The Nifty and Sensex ended the week with gains of around 1%, though momentum remained muted due to persistent foreign outflows. Foreign Institutional Investors (FIIs) continued their aggressive selling, offloading nearly ₹ 10,000 crore in the cash market, while Domestic Institutional Investors (DIIs) absorbed the pressure with strong buying worth ₹ 19,000 crore. Broader markets staged a recovery across sectors, led by pharma and auto stocks, though FMCG lagged. According to stock market experts, various domestic and global market triggers are expected to dictate Dalal Street movement. However, GST reforms announced by the Indian Prime Minister Narendra Modi in his Independence Day speech and the 'progress but no deal' outcome from the Trump-Putin meeting in Alaska are expected to play a dominant role during the first few sessions. However, they maintained that US Fed minutes, renewed fear of Trump's tariffs on India, favourable monsoon season in the domestic market, and Indian inflation hitting a record low are some other triggers, which can't be ignored. 1] Trump-Putin meeting outcome: Speaking on the result of the Putin-Trump meeting, Avinash Gorakshkar, a SEBI-registered fundamental analyst, said, "The most-awaited Trump-Putin meeting has ended with progress without any deal. Both leaders agreed to meet for the next round of talks, which is a good sign of ending the Russia-Ukraine war. Ahead of the meeting, the US President had vowed to walk out of the meeting if he didn't like Russian President Vladimir Putin's line of approach. 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