How glitter of gold can help your equity heavy portfolio to outshine
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The portfolio with a heavy equity weight (70% equity) has underperformed in 2025 so far due to high volatility driven by global uncertainties, demand growth challenges, and concerns about corporate India's earnings growth . However, over the long term, equities have outperformed both debt and gold.Conversely, the debt-heavy portfolio (with a 60% allocation) has performed well in 2025 so far but ranked at the bottom over the long run. Additionally, its performance has seen high volatility since 2020.Gold has become a crucial asset. The portfolio with no gold exposure remained among the two biggest underperforming portfolios for six years between 2015 and 2025. The significance of gold is also evident in the long run. A portfolio without any gold is the second-worst performer over the last 10 years. Low correlation with equities, hedge against inflation, and safe-haven status make gold a key asset for managing investment volatility Though the equal-weighted portfolio has been the top performer so far in 2025, its performance was modest in the long run.ACE MF. *2025 data is YTD based on 15 July 2025 closing values. Other years' returns are calculated between the first and the last trading day closing values. Numbers in brackets are the weighted average returns (or portfolio returns) of the respective investment allocations. The 10-year weighted average return is based on compounded returns of the respective assets, calculated between 15 July 2015 and 15 July 2025. Benchmarks used: Equity: Nifty 500 Index, Debt: Crisil Composite Bond Index, Gold: Nippon India ETF Gold BeES
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Economic Times
5 days ago
- Economic Times
MF Tracker: HDFC Flexi Cap Fund turns Rs 10,000 SIP to nearly Rs 21.50 crore in 31 years
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A lumpsum investment of Rs 1 lakh made in this flexi cap fund five years ago would have been Rs 3.49 lakh with a CAGR of 28.44% and in the last three years, the value would have been Rs 1.85 lakh now with a CAGR of 22.83%.This Rs 80,000 crore fund, is benchmarked against NIFTY 500 Index (TRI) and is managed by Roshi on trailing returns across different horizons, the fund has outperformed its benchmark and category average in the last six months, nine months, one year, three years, and five years. On the other hand, it has just underperformed its benchmark and category average in the last three the last six months, the fund has offered 7.12% return against a return of 5.89% by its benchmark and 4.87% as the category average. In the last nine months, the flexi cap fund posted a return of 5.07% compared to 2.32% by the benchmark and 0.63% as the category average. In the last one year, where the fund lost 0.71% and the category on an average lost 0.71%, the fund gained 6.22%. 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Also Read | Only 3 equity MF categories offer positive average returns in July. International funds lead return chart An expert mentions that the fund adopts a dynamic investment approach, allocating assets across large-cap, mid-cap, and small-cap stocks based on market valuations and economic cycles although large cap stocks dominate the portfolio to account for over 70% of assets. That said, the flexibility of moving across market segments allows the fund to capitalize on emerging opportunities and several factors have contributed to the fund's superior track record over the years, the expert added.'In recent times the emphasis has been on investing in quality stocks with strong growth prospects and reasonable valuations, enhancing consistency and reducing volatility. The fund has strategically invested in stocks from sectors such as industrials, utilities, energy and consumer cyclicals, which have delivered pleasing results over the last few years. Also, by maintaining a diversified portfolio and adjusting allocations based on market conditions, the fund has managed risks effectively, providing investors with stable returns over the long term,' Himanshu Srivastava, Associate Director, Morningstar Investment Research investment objective of the fund is to generate capital appreciation / income from a portfolio, predominantly invested in equity and equity related instruments. In respect of each purchase / switch-in of units, an exit load of 1.00% is payable if units are redeemed/ switched-out within 1 year from the date of allotment. The minimum application amount, minimum additional purchase amount and minimum redemption amount is Rs 100 and any amount thereafter. The fund allocates 65-100% in equity and equity related instruments, 0-35% in debt securities and money market instruments and fixed income derivatives, 0-10% in units issued by REITs and InvITs, 0-10% in non-convertible preference shares, and 0-20% in units of mutual funds. Being a flexi cap fund, the fund holds 73.56% in large cap funds, 3.52% in mid caps, 13.15% in others, and 9.77% in small caps. In comparison to the flexi cap category, the fund is overweight on large caps, others, and small caps. The flexi cap category on an average holds 65.93% in large caps, 12.79% in mid caps, 11.88% in others, and 9.40% in small caps. Also Read | Only 3 equity MF categories offer positive average returns in July. International funds lead return chart According to Srivastava, given the current market volatility, investing in a flexi cap fund can be a strategic choice due to its flexibility in allocating across large, mid, and small-cap stocks and with market fluctuations and uncertainties, Systematic Investment Plans (SIPs) are generally recommended as they help average the purchase cost over time and reduce the risk of market timing.'SIPs are particularly suited for long-term investors, allowing them to ride out short-term market volatility. However, there is no harm in making Lump-sum investments as well if investors have investible surplus to invest. That said, SIPs are a more disciplined form of investing in mutual funds and offer a balanced approach in uncertain market conditions,' he second largest flexi cap fund has the highest allocation in banks of around 35.07%, followed by 14.39% in automobile and ancillaries. With respect to the flexi cap category, the fund is overweight on banks, automobile & ancillaries, healthcare, insurance, iron & steel, and aviation among the top 10 stock holdings whereas is underweight in IT, telecom, power, and construction PE and PBV ratio of the multi asset allocation fund were recorded at 35.95 times and 5.42 times respectively whereas the dividend yield ratio was recorded at 1.03 times as of June 2025. ETMutualFunds analysed the other key ratios of the fund in a three year period. Based on the last three years, the scheme has offered a Treynor ratio of 1.97 and an alpha of 0.59. The sortino ratio of the scheme was recorded at return due to net selectivity was recorded at 0.55 and return due to improper diversification was recorded at 0.04 in the last three investment style of the fund is to invest in growth oriented large cap from HDFC Flexi Cap Fund, there are around 29 funds in the category which have a track record of three years. Out of these 30 funds, Motilal Oswal Flexi Cap Fund offered the highest return of 24.16% in the last three years, followed by Invesco India Flexi cap Fund which gave 22.91% return in the same time period. Parag Parikh Flexi Cap Fund, the largest flexi cap fund based on assets managed, offered 20.74%. Samco Flexi Cap Fund offered the lowest return of around 3.02% in the said time at the past performance, Sagar Shinde, VP Research at Fisdom told ETMutualFunds that the outlook for flexi cap funds remains constructive and given their mandate to shift between market caps, they are well-positioned to benefit from sectoral and cyclical shifts.'As markets evolve and valuation gaps emerge across segments, skilled fund managers can take advantage of these opportunities. However, performance will depend on the manager's ability to read market signals and rebalance effectively. Over the medium to long term, flexi cap funds should continue to deliver competitive returns, especially for investors seeking diversification and active management,' he added. Also Read | Mutual funds allocate Rs 5,294 crore into IPOs, backing small cap growth stories: Ventura Another expert, Chirag Muni, Executive Director at Anand Rathi Wealth Limited shared this with ETMutualFunds that flexi cap funds are designed to offer the advantage of diversification and active management and by allowing fund managers the freedom to shift allocations across large, mid, and small-cap stocks, these funds aim to deliver better risk-adjusted returns and according to their earnings estimates, the Nifty 50 is expected to deliver an EPS growth of around 10% for FY26. 'We expect this earnings to be reflected in price appreciation as well. Given this, we can expect flexi cap funds to deliver returns in the range of 13–15% over the coming year. Investors can consider investing in flexi cap funds, however, that should not be the sole equity component in your portfolio as they are largely tilted towards large cap stocks which can limit diversification,' Chirag to the Sebi mandate, flexi cap funds should have a minimum investment in equity and equity related instruments of around 65% of total assets and these are open ended dynamic equity schemes investing across large cap, mid cap, small cap cap mutual funds offer the fund managers the freedom to invest across market capitalisations and sectors/themes. It means the fund managers can invest anywhere based on his outlook on the cap schemes are typically recommended to moderate investors to create wealth over a long period of time. Ideally, one should invest in these schemes with an investment horizon of five to seven should always consider risk appetite, investment horizon, and goals before making any 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
31-07-2025
- Time of India
Maximize Your Returns: Can multi-asset funds outperform traditional equity investments?
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News18
30-07-2025
- News18
SIP At Peaks Or Bottoms? Market Timing May Not Be As Crucial As You Think
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